JPM JP Morgan Chase and Co

By Natalia Drozdiak 

BRUSSELS--European Union antitrust authorities on Wednesday slapped HSBC Holdings PLC, J.P. Morgan Chase & Co. and Crédit Agricole SA with fines worth a total of 485 million euros ($519.7 million) for colluding to manipulate a benchmark interest rate.

The European Commission, the bloc's executive arm, said the banks breached EU antitrust rules by exchanging sensitive information and colluding on euro interest-rate derivative pricing, which is linked to the euro interbank offered rate.

Wednesday's announcement was the culmination of an EU cartel investigation that started around five years ago. It echoes the findings of U.S. and British regulators that have accused several financial institutions of widespread efforts to manipulate Libor and Euribor. Benchmark interest rates determine the cost of interbank lending.

"Banks have to respect EU competition rules just like any other company operating in the single market," EU antitrust chief Margrethe Vestager said.

"The Euribor rate on specific days can make a huge difference to the cash flow of a bank," she added.

Spokeswomen for all three banks said they disputed the commission's allegations. Crédit Agricole said it would appeal the fine, while J.P. Morgan and HSBC said they would consider doing so.

The EU filed formal charges against the three banks in 2014. The commission continued to investigate after EU authorities in 2013 levied a EUR1.71 billion fine against several other financial companies, accusing them of operating cartels involving benchmark interest rates.

Crédit Agricole, HSBC and J.P. Morgan Chase chose not to settle that cartel case, the commission said.

On Wednesday, the EU hit J.P. Morgan with the largest fine, of around EUR337.2 million, while Crédit Agricole was fined around EUR114.6 million. HSBC was fined around EUR33.6 million.

The EU said it determined the individual fines based on the banks' value of sales for the products and the duration of their participation in the cartel.

The EU's antitrust chief said the banks' traders exchanged strategies in corporate chat rooms. On a day when they managed to manipulate the rate in their favor, "they congratulated each other and thanked each other for work well done," Ms. Vestager said.

Margot Patrick contributed to this article.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

December 07, 2016 07:03 ET (12:03 GMT)

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