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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
RBS received immunity from fines for revealing the cartel to the Commission.<\/p>\n
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.<\/p>\n
“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.<\/p>\n