The agreement, which imposes large fines on several European firms including Deutsche Bank, Société Générale and Royal Bank of Scotland, also implicates two big American banks. Both JPMorgan Chase and Citigroup admit in it that their employees were involved in efforts to manipulate benchmark rates for borrowing in yen. The fines they agreed to pay are relatively modest, €80m and €70m respectively, but they are the first to be levied against American institutions in relation to the LIBOR scandal. This should add to the pressure on American regulators to be more even-handed, amid complaints that they have been quick to prosecute and fine foreign banks over the LIBOR scandal but have yet to reach any settlements or impose fines on any American firms.

The Commission also offered immunity to banks that blew the whistle on the cartel. UBS avoided a €2.5 billion fine and Barclays a €690m one for their part in rigging rates because they confessed early. This could encourage a race to own up by firms involved in gaming other benchmarks, including exchange rates (the subject of the latest investigation into market manipulation at big banks).

In the agreement the banks admit not only to attempting to rig rates, but also to doing so in collusion with other banks. This lays them open to especially damaging lawsuits from investors in assets affected by the rate-rigging, lawyers say, thanks to a quirk of American law. If the banks are shown to have colluded, the courts can apply a provision of America’s competition rules subjecting them to damages of three times the harm done. Several class-action lawsuits over the alleged manipulation of LIBOR for dollar-denominated borrowing are already under way. The banks have argued in court in New York that such collusion was implausible. This week’s settlement indicates that it did occur in several similar markets.