EU fines global banks $2.3 bln for market rigging

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AMSTERDAM (AP) — The European Commission has fined agroup of major global banks a total of 1.7
billion euros ($2.3 billion)for colluding to profit from the manipulation of key interest rates.Thebanks,
which include JP Morgan, Citigroup and HSBC, are accused ofmanipulating for years European and Japanese
benchmark interest ratesthat affect hundreds of billions of dollars in contracts globally, frommortgages to
credit card bills.The Commission, the EU’s executivearm, is only the latest to punish banks for profiting
from manipulatinginterest rates, after similar cases brought by U.S. and nationalEuropean market
regulators."We want to send a clear message thatwe are determined to find and punish these
cartels," competitioncommissioner Joaquin Almunia said Wednesday.The banks named asparticipating in
cartels were Barclays, Deutsche Bank, Royal Bank ofScotland, Societe Generale, Credit Agricole, HSBC,
JPMorgan, UBS andCitigroup.In a first cartel, which operated from 2005 to 2008 andwas focused on
euro-denominated derivatives, Deutsche Bank received thelargest fine, of 468 million euros, followed by
Societe Generale with445 million euros. RBS was fined 131 million euros.Barclaysescaped a 690 million-euro
fine because it was the bank that notifiedthe Commission of the cartel’s existence, while JPMorgan, HSBC
andCredit Agricole have as yet not settled. JPMorgan and HSBC deniedwrongdoing Wednesday, though JPMorgan
settled with the Commission in asecond cartel case."This is not the end of the story,"
Almuniasaid. He noted that further investigations are possible and theCommission is also probing a cartel it
believes manipulated derivativesdenominated in Swiss francs.In a response to the fine, DeutscheBank Chief
Executive Juergen Fitschen referred to the euro cartel as a"legacy issue" caused by "past
practices of individuals" at the bank.Fitschen has worked there since 1987 and became CEO in
2012.Heacknowledged participating in the cartel had been a "gross violation" ofthe bank’s ethics.
But he said the fine wouldn’t hurt the bank’sprofits as it has already made provisions for the fines it
deemed likelyfrom regulators.A second cartel fined by the Commission onWednesday operated from 2007 to 2010
and focused on yen-basedderivatives. The largest fines went to RBS and Deutsche Bank, 260million euros each,
while UBS received immunity from a staggering 2.5billion-euro fine for revealing the existence of the
cartel.SocieteGenerale said its role was limited to a single trader who acted withoutknowledge of
management. RBS, which has previously been fined by theU.S. and British authorities in rate-fixing cases,
was more apologetic.ChairmanPhilip Hampton said the bank’s management became aware some of itsemployees had
been helping fix rates in 2011 and has taken action toprevent it happening again. It has been keeping its
team of interestrate traders separate from the rest of the company, monitoring itsactions, and appointing a
review board."The RBS board and newmanagement team condemn the behavior of the individuals who
wereinvolved in these activities," Hampton said. "There is no place for itat
RBS."_____Associated Press reporters Dave McHugh,Danica Kirka and Lori Hinnant contributed to this
story from Frankfurt,London and Paris.Copyright 2013 The Associated Press. All rightsreserved. This material
may not be published, broadcast, rewritten orredistributed.

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