Banks and broker-dealers ensnared in the Libor-rigging scandal are facing fresh pressure to settle with Europe’s top competition authority as it expands the scope of its probes.

The European Commission’s 18-month antitrust investigation, previously known to include yen and euro denominated swaps, has been extended to include Swiss franc-linked instruments and poses a big regulatory threat to the financial institutions under scrutiny, according to sources.

The commission can impose a maximum penalty equivalent to 10 per cent of a firm’s global turnover for each cartel it is found to be involved with. A bank implicated in all three investigations could, for example, face fines of up to 30 per cent of total revenues.

In a speech today in Paris, the EU’s competition commissioner will stress his determination to pursue the cases and ensure competition enforcement complements actions of global authorities against misconduct and corruption.

Joaquín Almunia’s speech will be interpreted as a warning to financial institutions that are holding out against antitrust authorities.

The commission has not named any banks or interdealer brokers implicated in its current investigations.

– (Copyright The Financial Times Limited)