European Commission: sanctions for Crédit Agricole, HSBC and JP Morgan for euribor manipulation


The case of the Euribor manipulation continues to make headlines. The European Commission (EC) has imposed fines totaling €485 million on HSBC, JPMorgan and Crédit Agricole because of their participation, together with Barclays, Deutsche Bank, RBS and Société Générale, in an alleged manipulation of the interbank interest rate (Euribor) on derivatives. The EC considers this behavior to be contrary to Article 101 of the Treaty on the Functioning of the European Union. These uncompetitive practices were also performed using the Yen (December 2013 and February 2015) and with Libor (October 2014), which the EC has also investigated.

In the case of the Euribor manipulation, the investigation began in 2008 with the application for exemption from a fine filed by Barclays with the EC. Subsequently, Deutsche Bank, RBS and Société Générale also decided to cooperate with the EC under a leniency program, as a result of which they benefitted from a reduction of their fines (50% in the case of RBS, 30% in the case of for Deutsche Bank and 5% in the case of Société Générale).

Later, in 2013, Barclays, Deutsche Bank, RBS and Société Générale agreed to an ending of the EC investigation and, in a settlement procedure, obtained a further 10% reduction of their fines. On December 4, 2013, the EC issued a first decision establishing that between September 2005 and May 2008 these four institutions had agreed the prices of interest rate derivatives in euros and had exchanged sensitive information among themselves. Given these actions, and once the indicated reductions had taken place, the EC imposed fines for466 million on Deutsche Bank, €228 million on Société Générale and €131 million on RBS (Barclays benefitted from total immunity).

Following these first sanctions, the investigation continued for a further three years in the case of those banks that had not accepted the EC charges: HSBC, JP Morgan and Crédit Agricole, although the final result turned out to be the same, and in December 2016 fines were imposed for €114.654 million on French bank Crédit Agricole; €33.606 million on British bank HSBC; and €337.196 million on US bank JPMorgan.

According to the EC, employees of the banks involved in the cartel were in regular contact using corporate chat systems and instant messaging services. They shared information on their commercial strategies and prices with the aim of distorting the normal price-fixing process for interest rate derivatives in euros.

This is the latest EC ruling on uncompetitive practices in relation to financial instruments, although as we have said, there have been precedents such as the mentioned cases involving the Yen and Libor.