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EUROPEAN COMMISSION
STATEMENT
Brussels, 21 October 2014
Statement by Vice President Joaquín Almunia on 2 cartel
decisions concerning Swiss Franc Related Derivatives
Today the European Commission has found and sanctioned two distinct cartels
financial sector. In these two decisions, we have imposed total fines of about 94
euros on four major international banks who violated EU antitrust rules. In both
these banks agreed to settle these cases with the Commission, as foreseen
procedures.
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These two decisions relate to the sector of interest rate derivatives in the Swiss Franc
currency. These financial products allow companies to hedge the risk of interest rate
fluctuations, as a kind of insurance mechanism.
We have uncovered two separate infringements of EU competition rules in this sector:
- The first one involves collusive practices by two banks, RBS and JP Morgan, in relation to
the Swiss Franc LIBOR, a benchmark interest rate. The two banks colluded between March
2008 and July 2009 to try to influence this benchmark, in order to distort the normal
course of the pricing of the derivatives indexed on it. This decision follows our two
previous decisions related to EURIBOR and Yen LIBOR last December. It shows once again
the Commission's determination to penalise this type of conduct, which is a clear violation
of EU antitrust rules.
- Our second decision is about a cartel between four leading market makers in Swiss Franc
interest rate derivatives, namely RBS, UBS, JP Morgan and Credit Suisse. In this case,
unlike in previous cartels in the sector, the banks did not collude to influence a
benchmark. Rather, they directly agreed to collectively fix a pricing element which should
have been determined by market forces alone. This is the kind of typical price-fixing cartel
which is also found in other sectors. Indeed, between May and September 2007, the four
banks agreed on the so-called "bid-ask" spread, which is the difference between the price
at which a bank is willing to sell and to buy a given product. They agreed to quote wider,
fixed spreads to all third parties on certain categories of derivatives, while maintaining
narrower spreads between themselves. One of their objectives was to prevent other
players from competing on the same terms in this market.
Both decisions are based on a settlement with the banks, who recognised their
involvement and in exchange received a reduction of 10% of their respective fines. This
allowed the Commission to conclude the investigations through a quicker procedure.
The fines are based, in particular, on the value of sales of the relevant products and the
duration of the infringements.
RBS also received full immunity for revealing the existence of these agreements to the
Commission and both UBS and JP Morgan received reductions in their fines because of
their cooperation with the investigation, as they brought valuable evidence to us.
STATEMENT/14/330
Acting against financial cartels is one of our top priorities, given the importance of a
healthy, transparent, well-functioning financial sector for the entire economy. All market
players in this sector must be aware that no violation of antitrust rules will be tolerated.
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