Wednesday, December 7, 2016

Brussels punishes three banks for an agreement on the euro interest rates – The World

Crédit agricole, HSBC and JPMorgan Chase are convicted by the european Commission to have participated in an agreement on the interest rates in euro.

The european Commission has announced, on Wednesday 7 December, to have imposed a fine for € 485 million to Crédit agricole, HSBC and JPMorgan for having participated in an agreement to manipulation of interest rates in euro (euribor). Crédit agricole has immediately announced an appeal of the sanction.

” The european Commission has imposed a fine of € 485 million for agricultural Credit, [uk] HSBC [u.s.] JPMorgan Chase, for having participated in an agreement on the interest rate in euro (Euribor) “, according to a press release of the eu executive.

The fine is the higher returns to JPMorgan Chase, which involved five months of this agreement. It amounted to close to € 337 million. Then came the Credit agricole with nearly 114.5 million euros (also five months of participation), and HSBC (one month) for approximately $ 33.5 million.

” The banks have agreed on the elements of setting interest rates in the euro, and exchanged sensitive information in breach of the competition rules of the EU “, adds the Commission.

These three banks had decided not to accept a decision of the european executive in December 2013 in the same case, in contrast to their competitors, Barclays, Deutsche Bank, Royal Bank of Scotland and Société générale. In contrast to these four institutions, Crédit agricole, HSBC and JPMorgan were still under investigation by the Commission.

In December 2013, Société générale, Deutsche Bank and the Royal Bank of Scotland were fined while Barclays was granted immunity and escaped any kind of punishment for having revealed the existence of the cartel to the Commission.

Arsenal against market manipulation

the scandal of The Euribor (and Libor), which had broken out at the end of 2012, had led the european Union to harden its legislative arsenal against perpetrators of market manipulation.

Euribor (Euro interbank offered rate – ” euro interbank offered rate “), such as the Libor, a rate at which banks lend money both between themselves and that serves as an indirect reference to the credit to households and businesses. The “interbank market” allows a bank to lend money to their peers or, on the contrary to borrow, when the amount of its deposits is higher or lower than the credit demand of its customers.

The Euribor is specialized in trade between euro area banks, while the Libor rate is preferred by the banks, anglo-saxon, even if it is declined for several major currencies, like the dollar, the euro or the pound sterling.


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