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Home BUSINESSEU accuses three big banks of interest rates manipulation
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Wed, 21 May, 2014 12:00:55 AM
FTimes- Xinhua Report, May 21
 
     
"Credit Agricole, HSBC and JPMorgan ... may have breached European Union (EU) antitrust rules by colluding to influence the pricing of interest rate derivatives denominated in the euro currency," the Commission said in a statement of objection.
     
A statement of objection is a formal step in Commission investigations into suspected violations of EU rules on restrictive business practices.  
     
Interest rate derivatives are traded worldwide and play a key role in the global economy.
     
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. If established, such behavior may result in a fine of up to 10 percent of a company's annual worldwide turnover.
     
A Commission spokesperson said the three banks will have the opportunity to defend themselves. "We will look carefully at all their arguments before taking any final decision," the spokesperson added.
     
"Obviously, if it is confirmed that these three banks participated in the cartel, it would be a very serious infringement and the Commission would impose sanctions," the official said.
     
The spokesperson underlined that antitrust investigations into the financial sector were a top priority for the Commission, adding that investigations were being pursued against a broker in the yen interest rate derivatives market, the Swiss Franc Interest Rate Derivatives market, foreign exchange spot trading market (FOREX), and possible collusion relating to benchmarks for oil and biofuels.
     
In October 2011, the Commission had carried out unannounced inspections at the premises of several banks. In the course of its investigations, the Commission imposed fines totaling 1.04 billion euros (1.42 billion U.S. dollars) on four banks active in the same sector in December 2013.
     
These four banks had admitted their involvement in a cartel relating to euro interest rate derivatives, which allowed the Commission to settle the case with them. In return, the fines for these four banks were reduced by 10 percent. 
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