Banks fined €485m by EU commission insist they did nothing wrong

Crédit Agricole, JPMorgan Chase and HSBC ‘distorted’ interest rate derivatives, says EU

EU commissioner for competition Margrethe Vestager. The European Commission has fined the banks for participating in a cartel that set out to distort interest rate derivatives linked to  Euribor benchmark rates. Photograph: Aris Oikonomou/EPA

EU commissioner for competition Margrethe Vestager. The European Commission has fined the banks for participating in a cartel that set out to distort interest rate derivatives linked to Euribor benchmark rates. Photograph: Aris Oikonomou/EPA

 

Crédit Agricole, JPMorgan Chase and HSBC have hit back against the European Commission’s decision to fine the banks €485 million for participating in a cartel concerning the pricing of interest rate derivatives denominated in euros.

In response to the fines, which were announced on Wednesday morning by EU competition policy chief Margrethe Vestager, the trio said they still believed they had done nothing wrong. France’s Crédit Agricole said it would appeal against the decision, while its US and UK rivals said they were considering whether to appeal.

Ms Vestager said banks “have to respect EU competition rules just like any other company operating in the single market”. The Commission said its decision was “binding proof” that the banks had acted illegally and could be followed by civil lawsuits from any parties affected negatively by their actions.

Wider investigation

“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.

“The participating traders of the banks were in regular contact through corporate chatrooms or instant-messaging services,” the commission said.

“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.”

Geographical scope

“The enforcement of competition rules brought to light widespread collusion between banks,” she said.

The commission’s investigations into Euribor were one of a number of investigations that global antitrust regulators launched following revelations in 2012 of rigging and attempted manipulation of key market benchmark rates.

– Copyright The Financial Times Limited 2016