JPMorgan Chase & Co. (JPM) agreed to pay 72.2 million euros ($92 million) in fines to European Union regulators for attempting to rig the Swiss franc Libor rate and fixing spreads with rivals, the EU said today.
UBS AG (UBSN) was fined 12.7 million euros by the EU and Credit Suisse Group AG (CSGN) must pay 9.2 million euros for colluding with JPMorgan to set spreads on Swiss franc interest rate derivatives, the European Commission said. Royal Bank of Scotland Group Plc escaped fines in the two antitrust cases because it blew the whistle on the conduct.
“Acting against financial cartels is one of our top priorities,” EU Competition Commissioner Joaquin Almunia said in a statement. “No violation of antitrust rules will be tolerated.”
The penalties are the latest EU fines in the global scandal over rate rigging. JPMorgan and RBS were among financial companies that agreed to pay a total of 1.7 billion euros in December for colluding over derivatives linked to the London and euro interbank offered rates. The EU is also investigating whether banks rigged foreign-exchange rates.
JPMorgan was fined for trying to manipulate the Swiss franc London interbank offered rate between March 2008 and July 2009, the EU said today. The bank was also fined separately for agreeing with UBS and Credit Suisse to quote fixed spreads for certain types of Swiss franc interest-rate derivatives while keeping narrower spreads themselves.
JPMorgan “cooperated fully” with the EU, according to a statement from the New York-based bank. “The settlement makes no finding that JPMorgan Chase management, or any other JPMorgan Chase employee, had any knowledge or involvement in the conduct at issue, or that the trader’s actions had any impact on the firms’ Swiss Franc Libor submissions or the published Swiss Franc Libor rates.”
Credit Suisse said it “decided to settle this case, which relates to bid-offer spreads charged on short-term interest rate derivatives, in order to avoid lengthy legal proceedings,” according to an e-mailed statement.
RBS condemns the behavior of “a small number of employees” that was unacceptable, it said in an e-mailed statement. Once discovered, management informed competition regulators to resolve the issue, it said.
A spokeswoman for UBS declined to comment.
Andreas Schwab, a member of the European Parliament from Germany, said he was “surprised” by the level of fines in relation to the December penalties in the yen Libor and Euribor cases.
“Trust and the respect of the existing rules play an important role” in the financial market, Schwab said in a phone interview. “If there is a small doubt that these are misused by the major players this is an awful situation for the whole market.”
The banks received reduced fines because they agreed to settle with regulators. UBS and JPMorgan also got bigger cuts for aiding the investigations, the EU said.
Libor, and Euribor, the Euro interbank offered rate, gauge banks’ estimated cost of borrowing over different periods of time. Libor is the benchmark interest rate for more than $300 trillion of securities.
Regulators across the world have been examining suspected manipulation of Swiss franc Libor. The Swiss Competition Commission granted UBS conditional immunity in connection with some potential violations related to Swiss franc Libor, according to a company filing.
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