- Title: EU fines Credit Agricole, HSBC, JPMorgan for Euribor fixing
- Date: 7th December 2016
- Summary: BRUSSELS, BELGIUM (RECENT) (REUTERS) EXTERIOR OF EU COMMISSION BUILDING EU FLAGS ENTRANCE TO EU COMMISSION BUILDING
- Embargoed: 22nd December 2016 11:10
- Keywords: EU Antitrust Vestager Banks Eurobor HSBC JPMorgan Credit Agricole
- Location: BRUSSELS, BELGIUM
- City: BRUSSELS, BELGIUM
- Country: Belgium
- Reuters ID: LVA0015BVX26F
- Aspect Ratio: 16:9
- Story Text: The European Commission said on Wednesday (December 7) they fined banks Credit Agricole, HSBC and JPMorgan Chase a total of 485 million euros for their part in a cartel to manipulate the price of a financial benchmark linked to the euro.
"They colluded on a financial product called 'Euro Interest Rate Derivatives' in breach of antitrust rules," EU Competition Commissioner Margrethe Vestager told a news conference.
Vestager said the banks were part of a seven-bank cartel that colluded between September 2005 and May 2008 to distort the Euribor benchmark interest rate used to reflect the cost of interbank lending.
"Over different periods of time between 2005 and 2008, participating traders were in regular contact in corporate chatrooms or instant messaging services. They exchanged confidential and sensitive information about their trades and their strategy for trading so what exactly did they do? Well, the aim of the cartel was to distort a pricing component for 'Euro Interest Rate Derivatives,' the so-called 'Euribor rate,'" Vestager said.
She explained the traders used the chatroom to agree to rates beneficial to their trading operations.
"The traders involved tried to submit quotes either to move the Euribor rate up or to move it down -- of course depending on what benefited them on that particular day. On days when traders received money calculated money on the basis of Euribor, well, then he had an interest of a high Euribor rate. On days when a trader needed to pay, then he would want to have a low Euribor rate," Vestager said.
JPMorgan Chase was fined 337.2 million euros and Credit Agricole 114.7 million euros for five-month participations in the cartel. HSBC was set to pay 33.6 million euros for participating in the cartel for just one month.
Deutsche Bank, RBS and Societe Generale admitted guilt in December 2013 and were fined 824.6 million euros, the sixth largest collective cartel fine ever handed down by the European Commission. Barclays avoided a penalty because it alerted the Commission.
The Bank for International Settlements put the market value of over-the-counter interest (OTC) rate derivate contracts in euros was $6.4 trillion in the first half of 2016, 31 percent of all OTC derivatives. Such trades would typically be based on financial benchmarks.
U.S. and European regulators have so far handed down large fines to more than 10 banks and brokerages for rigging the London interbank offered rate (Libor), used for various currencies including the yen, and its euro cousin Euribor. Prosecutors have also charged more than a dozen men with fraud-related offences. - Copyright Holder: REUTERS
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