Der Spiegel reported on Aug. 3, from law enforcement and regulatory sources in Germany, that EU and German regulators, including BaFin, are concluding that there was systemic rigging for profit, by major banks, of the immense global interest-rate-swap/foreign-exchange-swap derivatives market. A shorter NYT "DealBook" piece Aug. 5 reports essentially the same thing, and both stress that bank managements are now cooperating, "investigating", and fingering each other. "I've only seen this kind of behavior before in connection with the mafia," one regulator is quoted by Spiegal.
The regulators are referring to the banks' LIBOR-rigging activity as "a bank cartel in restraint of trade," said Spiegel. Criminal and/or civil proceedings on this line will aid the class-action lawsuits of cities, authorities, pension funds, and small banks internationally. The most important of those suits launched so far, charge exactly this.
It is clear that the primary targets of EU and German agencies, according to both the Spiegel and Times accounts, are Deutschebank, UBS, and HSBC, with Citibank also targetted. The targets are actually lower down, though: 44 derivatives traders, according to Spiegel, who worked at a total of 13 banks (some at more than one of the banks) from 2001-07. Supposedly top executives joined the rigging only in 2007, to save the banks through lower LIBORs and bailouts.
The paper says many of these traders (it names two) are going to be criminally prosecuted, but does not indicate by whom. Constant reports in the financial press that the U.S. Department of Justice is preparing criminal prosecutions, may be simply providing a cover for the DoJ. According to the Times' sources, in the United States it is still only the CFTC which is conducting serious bank investigations.