EU charges 3 of world’s biggest banks with rate rigging

The European Union's anti-trust regulators on Tuesday charged Europe`s biggest bank HSBC along with rivals JPMorgan of the US and France`s Credit Agricole with rigging financial benchmarks linked to the euro.

In a ruling that could expose these lenders to large fines, the European Commission also said it would charge broker ICAP soon for suspected manipulation of the yen Libor financial benchmark.

US and European regulators have so far handed down some $6 billion in fines to 10 banks and brokerages for rigging the London interbank offered rate (Libor) and its euro cousin Euribor while prosecutors have also charged 16 men with fraud-related offences.

"The Commission has concerns that the three banks may have taken part in a collusive scheme, which aimed at distorting the normal course of pricing components for euro interest rate derivatives," the EU competition authority said.

The three banks and ICAP, which refused to settle the case in December, could face penalties of up to 10 per cent of their global turnover if found guilty of breaching EU antitrust rules.

JPMorgan said the EU charges were without merit and that it would defend itself while Credit Agricole said it would examine the charge sheet. HSBC said it would defend itself vigorously.

In December a record fine of €1.7 billion was levied on six banks, including Deutsche Bank, theRoyal Bank of Scotland and Citigroup, for similar offences. The lenders settled their charges and received a 10-per cent cut in their fines.

Asked about the ongoing Libor probe against ICAP, European Competition Commissioner Joaquin Almunia told a news conference, "In the coming days or weeks, we will probably issue a new statement of objections against the broker."

Almunia also said regulators have yet to decide on the next step of an ongoing investigation into suspected rigging and collusion in the trillion-dollar foreign exchange market, the world`s biggest marketplace.

"We received lots of information and we are looking into this information...We are not yet at this moment when I can announce steps of this case," he said.

More than 30 foreign exchange traders at many of the world`s biggest banks have been put on leave, suspended or fired as the forex probes in the EU countries expand.

The probe focuses on activity related to the key foreign exchange benchmark, known as the WM/Reuters fix, which is tied to several exchange rates including the euro, sterling, Swiss franc and yen set daily in London.