EU Fines JP Morgan, HSBC, Credit Agricole $520 Million for Collusion -- Update
December 07 2016 - 07:18AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS--European Union antitrust authorities on Wednesday
slapped HSBC Holdings PLC, J.P. Morgan Chase & Co. and Crédit
Agricole SA with fines worth a total of 485 million euros ($519.7
million) for colluding to manipulate a benchmark interest rate.
The European Commission, the bloc's executive arm, said the
banks breached EU antitrust rules by exchanging sensitive
information and colluding on euro interest-rate derivative pricing,
which is linked to the euro interbank offered rate.
Wednesday's announcement was the culmination of an EU cartel
investigation that started around five years ago. It echoes the
findings of U.S. and British regulators that have accused several
financial institutions of widespread efforts to manipulate Libor
and Euribor. Benchmark interest rates determine the cost of
interbank lending.
"Banks have to respect EU competition rules just like any other
company operating in the single market," EU antitrust chief
Margrethe Vestager said.
"The Euribor rate on specific days can make a huge difference to
the cash flow of a bank," she added.
Spokeswomen for all three banks said they disputed the
commission's allegations. Crédit Agricole said it would appeal the
fine, while J.P. Morgan and HSBC said they would consider doing
so.
The EU filed formal charges against the three banks in 2014. The
commission continued to investigate after EU authorities in 2013
levied a EUR1.71 billion fine against several other financial
companies, accusing them of operating cartels involving benchmark
interest rates.
Crédit Agricole, HSBC and J.P. Morgan Chase chose not to settle
that cartel case, the commission said.
On Wednesday, the EU hit J.P. Morgan with the largest fine, of
around EUR337.2 million, while Crédit Agricole was fined around
EUR114.6 million. HSBC was fined around EUR33.6 million.
The EU said it determined the individual fines based on the
banks' value of sales for the products and the duration of their
participation in the cartel.
The EU's antitrust chief said the banks' traders exchanged
strategies in corporate chat rooms. On a day when they managed to
manipulate the rate in their favor, "they congratulated each other
and thanked each other for work well done," Ms. Vestager said.
Margot Patrick contributed to this article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
December 07, 2016 07:03 ET (12:03 GMT)
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