Although all three banks have repeatedly declined their involvement in Euribor manipulations, the Antitrust Commission issued real fines for the banks today and presented the evidence.
Following the last month's pre-announcement, the European Antitrust Commission has published the official statement earlier today claiming that it confirmed HSBC (NYSE:HSBC), Crédit Agricole (Euronext Paris: Credit Agricole [ACA]) and JPMorgan (NYSE: JPMorgan Chase & Co [JPM]) participation in the 7-bank cartel that manipulated the interest rate of Euribor benchmark between 2005 and 2008. Over the last months, all three banks said they did not participate in these manipulations and all Commission's charges were "without merit". However, since the previous warning, the EU Antitrust Commission has come up with individual fines for the banks and closed the 5-year investigation.
According to the statement, HSBC will be fined €33.6 million for participating in the cartel for 1 month, Crédit Agricole faces a fine of €114.7 million for 5 month of manipulations whereas JPMorgan received the highest amount, €337.2 million, for a 5-month membership. The EU said that the individual fines were calculated depending on the value of sales and duration of the banks' participation in the cartel.
The Commission said that they found chat room messages the bank traders exchanged, congratulating each other for the profits, adds Reuters.
"The participating traders of the banks were in regular contact through corporate chat-rooms or instant messaging services. The traders' aim was to distort the normal course of pricing components for euro interest rate derivatives. They did this by telling each other their desired or intended Euribor submissions and by exchanging sensitive information on their trading positions or on their trading or pricing strategies. This means that the seven banks colluded instead of competing with each other on the euro derivatives market," the Antitrust Commission wrote in the statement.
Four other banks that participated in the cartel like Deutsche Bank (NYSE: Deutsche Bank [DB]) and Société Générale (Euronext Paris: Societe Generale [GLE]) admitted their guilt back in 2013 and settled for a collective fine of €824.6 million. Back then, HSBC, Crédit Agricole and JPMorgan declined to cooperate.
"On days when traders received money calculated on the basis of Euribor, (they) had an interest in a high Euribor rate. On days when a trader needed to pay, he would want to have a low Euribor rate. The participation in such schemes was very lucrative for the banks. Tiny, tiny movements in the Euribor rate can have a huge impact because of the volumes of trading," the EU Competition Commissioner Margrethe Vestager told Reuters.
JPMorgan said today it didn't agree with the Commission's claim and planned to appeal to the European Court.