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European Union fines three banks in collusion case

Crédit Agricole, HSBC, and JPMorgan Chase to pay $520 million

NEW YORK — European antitrust regulators on Wednesday fined Crédit Agricole, HSBC, and JPMorgan Chase a total of just over 485 million euros for colluding to fix benchmark interest rates tied to the euro.

The penalties, equivalent to about $520 million, came more than two years after the European authorities issued a statement of objections — a formal step in antitrust investigations — against the three banks. The inquiry began in 2011.

In December 2013, the European Union fined a group of global financial institutions a combined 1.7 billion euros ($1.83 billion) to settle charges that they had colluded to fix benchmark interest rates, including the euro interbank offered rate, or Euribor. It was the largest combined penalty ever levied by European competition authorities.

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The three banks fined on Wednesday did not settle in 2013. The potential fines against those that did settle were reduced 10 percent.

Asked how much money the collusion had made for the banks involved, Margrethe Vestager, the commissioner in charge of European competition policy, told a news conference in Brussels that she could not give a precise figure.

Euribor and other benchmark interest rates help determine the costs of borrowing for trillions of dollars in loans, credit cards, and mortgages.

To set the Euribor and other benchmarks, banks submit the rates at which they would be prepared to lend to one another, on an unsecured basis, in various currencies and maturities.

In its investigation, the European Commission, the European Union’s executive arm, found that traders at seven banks — including Crédit Agricole, HSBC, and JPMorgan Chase — were involved in a cartel between September 2005 and May 2008 to improperly influence the pricing of euro interest rate derivatives.

The commission found that the traders, using chat rooms and instant messaging services, had shared their desired or intended submissions for Euribor and had exchanged information on their trading positions or on their trading or pricing strategies.

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Vestager noted what she said was vulgar language used by traders in the case.

“Even though it’s Christmas, I don’t think I should complement my green dress with very red cheeks, and I think I would be seriously blushing if I were to repeat any of the wording in some of those chat rooms,” she said.

JPMorgan Chase received the largest fine: 337.2 million euros ($363 million). Crédit Agricole was penalized 114.7 million euros ($123.5 million) and HSBC 33.6 million euros ($36.1 million). The banks have up to two years to appeal.