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HSBC was fined €33.6 million, Credit Agricole €114.7 million and JPMorgan €337.2 million for breaching regulation.
HSBC was fined €33.6 million, Credit Agricole €114.7 million and JPMorgan €337.2 million for breaching regulation.

EU Fines Three Top Banks $520m for Market Rigging

The traders’ aim was to distort the normal course of pricing components for euro interest rate derivatives

EU Fines Three Top Banks $520m for Market Rigging

The European Commission has fined HSBC, JPMorgan and Credit Agricole a total of €485 million ($520 million) for their role as part of a cartel that conspired to rig interest rate derivatives.
The EU’s antitrust watchdog said the banks colluded on manipulating euro interest rate derivative pricing elements and exchanged sensitive information “to distort the normal course of pricing”, news outlets reported.
HSBC was fined €33.6 million, Credit Agricole €114.7 million and JPMorgan €337.2 million for breaching regulation.
Commissioner Margrethe Vestager said: “A sound and competitive financial sector is essential for investment and growth. Banks have to respect EU competition rules just like any other company operating in the single market.”
The case covers manipulation of financial contracts linked to the benchmark Euribor interest rate in the period between 2005 and 2008.
Euribor is the eurozone’s version of Libor–the London interbank offered rate, which is ultimately used to value a range of financial products ranging from interest rates swaps between companies and mortgage products for households.
In 2013, antitrust regulators reached a settlement with Barclays, Deutsche Bank, Royal Bank of Scotland and Societe Generale as part of the same case.
The commission added: “The participating traders of the banks were in regular contact through corporate chat-rooms or instant messaging services.
“The traders’ aim was to distort the normal course of pricing components for euro interest rate derivatives. They did this by telling each other their desired or intended Euribor submissions and by exchanging sensitive information on their trading positions or on their trading or pricing strategies.”
“This means that the seven banks colluded instead of competing with each other on the euro derivatives market. This market is very important not only to banks but also to many companies in the single market, which use euro interest rate derivatives to hedge their financing risk,” the commission added.
The rate-rigging scandal erupted in June 2012 when Barclays was fined £290 million ($365.4 million) by regulators on both sides of the Atlantic, unleashing a wave of public anger about banks and sparking the parliamentary commissions into banking standards. It also led to a wave of other fines on banks and prompted the Treasury to change the rules so that the fines went to the exchequer rather than back to the regulator.
  Wrongdoing Denied
A spokesperson for JP Morgan said: “We have cooperated fully with the European commission throughout its five-year investigation. We did not engage in any wrongdoing with respect to the Euribor benchmark. We will continue to vigorously defend our position against these allegations, including through possible appeals to the European courts.”
HSBC said the decision related to “purported conduct” during one month in early 2007. “We believe we did not participate in an anti-competitive cartel. We are reviewing the European Commission’s decision and considering our legal options.”
“Credit Agricole firmly believes that it did not infringe competition law,” the French bank said.

  A Long Shadow
Just months after fines for Libor rigging were slapped on banks, it emerged that other markets were being manipulated. Vestager said an investigation into the manipulation of foreign exchange markets was continuing and was “a very large complex case with many participants”.
The decision is an example of the long shadow that still hangs over the industry from alleged misconduct during the years of the financial boom.
Vestager said: “A sound and competitive financial sector is essential for investment and growth. Banks have to respect EU competition rules just like any other company operating in the single market.”
The Euribor case is one of many involving the complicated business of setting benchmark rates, such as the Libor or the Yen Libor, that are used every day to set the price of a wide range of assets including mortgages or student loans.
Several inquiries into rate-rigging have already resulted in €1.8 billion in fines covering about 11 institutions in conspiracies to fix the Yen Libor, Swiss-Franc Libor and Euribor.

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