Tuesday 19 September 2017

Banking giant HSBC accused of rate rigging by European Commission

HSBC, JPMorgan and Credit Agricole are accused of colluding to manipulate the price of financial products linked to interest rates
HSBC, JPMorgan and Credit Agricole are accused of colluding to manipulate the price of financial products linked to interest rates

Foo Yun Chee

European Union antitrust regulators charged Europe's biggest bank HSBC, US peer JPMorgan and France's Credit Agricole with rigging financial benchmarks linked to the euro, exposing them to potential fines.

The European Commission also said it would charge broker ICAP soon for suspected manipulation of the yen Libor financial benchmark.

US and European regulators have, so far, handed down some $6bn in fines to 10 banks and brokerages for rigging the London interbank offered rate (Libor) and its euro cousin Euribor while prosecutors have also charged 16 men with fraud-related offences.

"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 competition authority said yesterday.

The three banks and ICAP, which refused to settle the case in December, could face penalties of up to 10pc of their global turnover if found guilty of breaching EU antitrust rules.

JPMorgan said the EU charges were without merit and that it would defend itself, while Credit Agricole said it would examine the charge sheet. HSBC said it would defend itself vigorously.

ICAP could not immediately be reached for comment.

In December, a record €1.7bn fine was levied on six banks including Deutsche Bank, Royal Bank of Scotland and Citigroup for similar offences. The lenders settled their charges and received a 10pc cut in their fines.

"In the coming days or weeks, we will probably issue a new statement of objections against the broker (ICAP)," European Competition Commissioner Joaquin Almunia said.

He also said regulators had yet to decide on the next step of an ongoing investigation into suspected rigging and collusion in the foreign exchange market.

Irish Independent

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