European Commission Adopts Decisions on Euro Interest Rate Derivatives Cartel

The European Commission adopted two decisions concerning the Euro Interest Rate Derivatives (EIRD) cartel recently. In December 2016, the Commission adopted a decision imposing fines on HSBC, Crédit Agricole and JPMorgan Chase, for their participation in the cartel. The General Court, however, annulled the fine on HSBC in 2019, whose participation in the cartel was confirmed, for insufficient reasoning.

The decisions, however, were re-adopted recently, and the European Commission has now imposed total fines of €31.739 million on HSBC Holdings plc, HSBC Bank plc and HSBC France (now called HSBC Continental Europe). The decisions explain in further detail how this fine was calculated.

For the same reason, the Commission recently adopted another decision amending the 2016 decision against Crédit Agricole (Crédit Agricole SA and Crédit Agricole Corporate and Investment Bank) and JPMorgan Chase (JPMorgan Chase & Co., JPMorgan Chase Bank, National Association and J.P.Morgan Service LLP). This decision aims at correcting the same irregularity (lack of sufficient reasoning of the fines imposed) identified by the General Court in the HSBC decision, pending the General Court's judgement in these two appeals.

About Interest Rate Derivatives

An interest rate derivative is a financial instrument with a value that is linked to the movements of an interest rate or rates. These may include futures, options, or swaps contracts. Interest rate derivatives are often used as hedges by institutional investors, banks, companies, and individuals to protect themselves against changes in market interest rates, but they can also be used to increase or refine the holder's risk profile or to speculate on rate moves.