EU fines three major banks over interest rate rigging

EU fines three major banks over interest rate rigging

In recent years about a dozen of the world's biggest banks have admitted widespread collusion to fix the rates illegally and were slapped with huge fines and even prison terms. Photograph: (Getty)

Brussels, Belgium Dec 7, 2016, 04.41 PM (IST)

The EU's top anti-trust regulator on today slapped fines on banks HSBC, JP Morgan and Credit Agricole for rigging the Euribor interest rate benchmark used for a wide range of financial instruments.

The European Commission, the EU's executive arm, fined the banks "a total of 485 million euros (USD 520 million) for participating in a cartel in euro interest rate derivatives," according to a statement.

The decision is the latest example of authorities trying to punish malpractice by the world's biggest banks in the years running up to the financial crisis in 2008.

The three banks had held out from a settlement with the EU in 2013 that saw Deutsche Bank, Societe Generale and Royal Bank of Scotland accept responsibility in the case.

"Today's message sends a clear message: banks and all companies have to respect EU rules," said the EU's competition chief Margarethe Vestager at a news briefing.

The Euribor case is one of many involving the complicated business of setting benchmark rates, such as the Libor or the Yen Libor, that are used everyday to set the price of a wide range of assets including mortgages or student loans.

In recent years about a dozen of the world's biggest banks have admitted widespread collusion to fix the rates illegally and were slapped with huge fines and even prison terms.

Four former Barclays bankers were jailed by a British court in July for manipulating the Libor interest rate between 2005 and 2007. 

(AFP)
 

STORY HIGHLIGHTS

EU fined HSBC, JP Morgan and Credit Agricole a total of 485 million euros for manipulating the Euribor interest rate

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