EU Fines JP Morgan 61 Million Euro for Collusion
CAPITALISM, 27 Oct 2014
Xinhua – TRANSCEND Media Service
The European Union (EU) on Tuesday [21 Oct 2014] fined U.S. banking giant J.P. Morgan more than 61 million euro (about 78 million U.S. dollars) for its participation in an illegal cartel aimed at influencing the benchmark interest rate.
The Commission said J.P. Morgan worked with Royal Bank of Scotland (RBS) to form a cartel aimed at influencing the Swiss Franc Libor (London interbank offered rate) benchmark interest rate between March 2008 and July 2009, which is prohibited according to EU antitrust rules.
This benchmark reflects an average of the quotes submitted daily by a number of banks who are members of a panel. It is intended to reflect the cost of interbank lending in Swiss francs and serves as a basis for various financial derivatives.
RBS received immunity from fines for revealing the cartel to the Commission.
J.P. Morgan was fined 61.68 million euros after receiving a reduction of 40 percent of its fine for its cooperation with the investigation and for agreeing to settle the case with the Commission.
“This is the third case where the Commission has found a cartel related to the manipulation of a financial benchmark, in which major banks colluded instead of competing with each other. Our economy needs a healthy, transparent, well-functioning financial sector. This is why antitrust rules in this sector must be strictly enforced,” said Joaquin Almunia, Commission Vice-President in charge of competition policy.
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