Banks slapped with €485m penalty for interest rate cartel

The European Commission has fined Credit Agricole, HSBC and JPMorgan and a total of €485 million (£413m) for their role as part of a cartel that conspired to rig interest rate derivatives.

HSBC denied being part of an 'anti-competitive cartel'. Picture: Scott Barbour/Getty Images
HSBC denied being part of an 'anti-competitive cartel'. Picture: Scott Barbour/Getty Images

The EU’s competition watchdog said the banks colluded on manipulating euro interest rate derivative pricing elements and exchanged sensitive information “to distort the normal course of pricing”.

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

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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.

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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.”

For its part, HSBC said it was considering its legal options and denied that it belonged to a cartel.

“The European Commission’s decision relates to allegations of Euribor manipulation and related purported conduct during the course of one month in early 2007,” the bank said.

“We believe we did not participate in an anti-competitive cartel. We are reviewing the European Commission’s decision and considering our legal options.”