JPMorgan, HSBC, Credit Agricole "Bank Cartel" Fined $521 Million For Euribor Rigging
By Tyler Durden
With global bank stocks soaring on expectations – and hope – that financial sector regulation will be broadly swept away under Trump, today Europe did its best to show that, at least for now, the banks are not in the clear when the European Commission has fined JPMorgan, Credit Agricole and HSBC a total of €485 million ($521 million) for rigging the Euribor benchmark as European Union antitrust regulators wrapped up a five-year investigation into the scandal.
The three banks colluded on euro interest rate derivative pricing elements, and exchanged sensitive information, in breach of EU antitrust rules, the European Commission said on Wednesday in an e-mailed statement. JPMorgan was fined 337.2 million euros, HSBC got a 33.6 million-euro penalty and Credit Agricole must pay 114.7 million euros. Margrethe Vestager, the EU’s competition policy chief, said banks “have to respect EU competition rules just like any other company operating in the single market.”
Fine of €485 million to 3 banks – Credit Agricole, HSBC, JPMorgan Chase – for participating in cartel of euro interest rate derivatives.
— Margrethe Vestager (@vestager) December 7, 2016
“The aim of the cartel was to distort” Euribor, Ms Vestager said. The traders involved “tried to submit quotes to move the Euribor rate up or down”. The Commission found evidence in records from online messaging services of traders “congratulating each other on work well done,” she said adding that “The enforcement of competition rules brought to light widespread collusion between banks.”
The fines mark the final stage in what began as a far wider investigation into a cartel of banks that manipulated interest rate derivatives linked to the Euribor benchmark rate. Four other banks reached a settlement with the Commission concerning the same cartel back in 2013.
As Bloomberg reports, the EU’s investigation into Euribor manipulation was strained three years ago after Credit Agricole, JPMorgan and HSBC refused to join a multi-bank settlement with four other lenders including Deutsche Bank AG and Societe Generale SA. Since then, the holdouts have been a thorn in the commission’s side, successfully delaying the process and showing up the regulator for its handling of the case. The three lenders were handed a statement of objections in May 2014 accusing them of colluding to rig Euribor rates in the wake of a global scandal embroiling some of the world’s biggest banks. By refusing to settle the case with the commission they forfeited the chance of a 10 percent discount on any fines.
Slap on the wrist-sized fine notiwthstanding, the banks remained defiant. JPMorgan “did not engage in any wrongdoing with respect to the Euribor benchmark,” Jennifer Zuccarelli, a spokeswoman for the bank in London, said in the statement. “We will continue to vigorously defend our position against these allegations, including through possible appeals to the European courts.”
Credit Agricole in a statement said it “firmly believes that it did not infringe competition law” and that “it will appeal the commission’s decision.” The fine payment “will not affect the 2016 financial statements given the …read more
Source: JPMorgan, HSBC, Credit Agricole "Bank Cartel" Fined $521 Million For Euribor Rigging
