The European Commission has fined banks Credit Agricole, HSBC and JPMorgan Chase a total of 485 million euros ($520 million) for their part in a cartel to fix the price of financial benchmarks linked to the euro.
They were part of a seven-bank cartel that colluded between September 2005 and May 2008 to distort the Euribor benchmark interest rate used to reflect the cost of interbank lending. JP Morgan was fined 337 million euros, Credit Agricole 115 million euros and HSBC is being asked to pay 34 million euros.
The trio of banks had held out against a September 2013 settlement when the European Commission imposed almost 1 billion euros of fines on Deutsche Bank, Société Générale and Royal Bank of Scotland.
Credit Agricole has said it will appeal the fine before European courts. Meanwhile, the European Commissioner for Competition, Margrethe Vestager, told a Brussels press conference that these latest fines send a clear message.
“Banks, like all companies, have to respect EU competition rules and financial markets need to be competitive,” she said Wednesday.
Vestager cited an example when traders agreed on chat rooms to submit quotes that would, on aggregate, lower the Euribor rate on March 19.
“And it worked, we found a number of chats of traders congratulating and thanking each other for work well done. The participation in such schemes was very lucrative for the banks,” she said. Vestager added that even tiny variations in the Euribor rate had a huge impact because of high trading volumes.
The EU commissioner said promises of drinks and other gifts were made in online chatrooms after representatives from different banks were successful in securing a “rigged” benchmark rate. And Vestager added that she would “seriously blush” if she had to repeat some of the conversations she read on trader’s posts.
“It seems to be a very closed community, with a very free language, so to speak,” she told reporters.
At the conclusion of her press conference statement, Vestager said she hope this closes this particular case but it does not end the European Commission’s work in the financial sector.