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JPMorgan, HSBC and Credit Agricole accused of euro rate-fixes | JPMorgan, HSBC and Credit Agricole accused of euro rate-fixes |
(about 1 hour later) | |
The European Commission has accused JPMorgan, HSBC and Credit Agricole of colluding to fix a key euro benchmark borrowing rate - Euribor. | |
JP Morgan and HSBC will fight the charges. Credit Agricole will study the European Commission's findings. | JP Morgan and HSBC will fight the charges. Credit Agricole will study the European Commission's findings. |
Penalties for the guilty are up to 10% of annual revenue. | Penalties for the guilty are up to 10% of annual revenue. |
Euribor is a cousin to Libor, which is used to set trillions of dollars of financial contracts from complex financial transactions to car loans. | Euribor is a cousin to Libor, which is used to set trillions of dollars of financial contracts from complex financial transactions to car loans. |
In December, the Commission imposed fines totalling 1.04bn on Barclays, Deutsche Bank, RBS and Societe Generale as part of the same investigation. | In December, the Commission imposed fines totalling 1.04bn on Barclays, Deutsche Bank, RBS and Societe Generale as part of the same investigation. |
Barclays escaped a fine as it had notified the Commission of the existence of the cartel, and the others were granted a 10% reduction in their fine for agreeing to a settlement. | Barclays escaped a fine as it had notified the Commission of the existence of the cartel, and the others were granted a 10% reduction in their fine for agreeing to a settlement. |
The EU's competition body said: "The Commission has concerns that the three banks may have taken part in a collusive scheme which aimed at distorting the normal course of pricing components for euro interest rate derivatives." | The EU's competition body said: "The Commission has concerns that the three banks may have taken part in a collusive scheme which aimed at distorting the normal course of pricing components for euro interest rate derivatives." |
JP Morgan said it had "co-operated fully with the European Commission throughout its investigation." The bank said it believed that the competition concerns were "without merit", and added it intended to "defend itself fully". | JP Morgan said it had "co-operated fully with the European Commission throughout its investigation." The bank said it believed that the competition concerns were "without merit", and added it intended to "defend itself fully". |
HSBC said: "We intend to defend ourselves vigorously." | HSBC said: "We intend to defend ourselves vigorously." |
Cartel? | Cartel? |
The Commission's investigation has centred around concerns that the banks may have manipulated the pricing of interest rate derivatives - financial products which are used by banks to manage risks associated with interest rate fluctuations. | The Commission's investigation has centred around concerns that the banks may have manipulated the pricing of interest rate derivatives - financial products which are used by banks to manage risks associated with interest rate fluctuations. |
The products derive their value from "Euribor", a benchmark interest rate which is the eurozone equivalent of Libor. | The products derive their value from "Euribor", a benchmark interest rate which is the eurozone equivalent of Libor. |
In March 2013, the Commission opened proceedings regarding Credit Agricole, HSBC and JPMorgan, and the investigation as whether they were part of a Euribor rate-rigging cartel is continuing. | In March 2013, the Commission opened proceedings regarding Credit Agricole, HSBC and JPMorgan, and the investigation as whether they were part of a Euribor rate-rigging cartel is continuing. |
Should the banks be fined, they will not receive any reduction in penalties, competition commissioner Joaquin Almunia said. | Should the banks be fined, they will not receive any reduction in penalties, competition commissioner Joaquin Almunia said. |