World Economy

EU Fines 3 Banks $120m

EU Fines 3 Banks $120mEU Fines 3 Banks $120m

The European Commission fined JPMorgan, UBS and Credit Suisse a total of 94 million euros ($120 million) on Tuesday for taking part in cartels in the financial sector.

JPMorgan received a 61.7 million euro fine for rigging the Swiss franc Libor benchmark interest rate between March 2008 and July 2009. It was also fined 10.5 million euros for participating in a cartel on Swiss franc interest rate derivatives, Reuters reported.

UBS’ penalty in the derivatives cartel came to 12.7 million euros and that of Credit Suisse was 9.2 million euros. Royal Bank of Scotland alerted both cartels to the Commission and was not sanctioned.

The penalties are the latest by the European Commission, which along with authorities around the world, has handed down billions of euros in fines against top banks for rate-rigging, breaking trade sanctions and other misbehavior.

“Acting against financial cartels is one of our top priorities, given the importance of a healthy, transparent, well-functioning financial sector for the entire economy,” European Competition Commissioner Joaquin Almunia said.

The EU competition watchdog said the banks in the interest rate derivatives cartel agreed to collectively fix a pricing element which should have been determined by the market, between May and September 2007 with the aim of preventing rivals from competing on the same terms.

All the banks admitted wrongdoing in return for a 10 percent reduction in their fines.

The Commission slapped a record 1.7-billion-euro fine on six financial institutions last December for rigging two financial benchmarks.

Banks who submit quotes for compiling Libor interest rates will have to follow a manual of instructions to avoid a repeat of the rigging seen in the past, the benchmark’s new administrator said on Monday.

Ten banks and brokerages have paid more than $6 billion to settle allegations of rigging the London Interbank Offered Rate or Libor, which is used to price $350 trillion of financial products globally, from credit cards to home loans.

The banks were accused of manipulating the quotes to make themselves look healthier or make more money on derivatives linked to Libor.