Following the earlier fines for Libor fixing, the European Commission has also fined another cartel.
Four banks – Royal Bank of Scotland and JP Morgan (both again) as well as UBS and Credit Suisse – were found to have operated a cartel on bid-ask spreads of Swiss franc interest rate derivatives.
The commission has imposed total fines on the banks of €32.35m, but again RBS received immunity from fines for revealing the cartel’s existence. UBS will pay €12.65m, JP Morgan €10.53m and Credit Suisse €9.17m. Commission vice-president in charge of competition policy, Joaquín Almunia, said:
Unlike in previous cartels we found in the financial sector, this one did not involve any collusion on a benchmark. Rather, the four banks agreed on an element of the price of certain financial derivatives. This way, the banks involved could flout the market at their competitors’ expense.
Royal Bank of Scotland and JP Morgan have been found guilty by the European Commission of operating a cartel to rig the Swiss franc Libor interest rate.
The offences took place between March 2008 and July 2009, with the banks trying to distort the normal pricing arrangements.
RBS was let off a fine because it revealed the existence of the cartel to the commission, while JP Morgan has to stump up €61.6m, reduced for co-operating with the investigation. Commission vice-president in charge of competition policy, Joaquín Almunia, said:
This is the third case where the Commission finds a cartel related to the manipulation of a financial benchmark, in which major banks colluded instead of competing with each other. Our economy needs a healthy, transparent, well-functioning financial sector. This is why antitrust rules in this sector must be strictly enforced.
Antitrust: Commission settles RBS-JPMorgan cartel in derivatives based on Swiss franc LIBOR; imposes € 61.6 million fine on JPMorgan
European Commission – IP/14/1189 21/10/2014