Cartel Digest

Interest Rate Derivatives (Swiss Franc Bid-Ask Spreads)

Interest Rate Derivatives (Swiss Franc Bid-Ask Spreads)
  Overall Cartel Period 2007-2007
  Participants RBS, UBS, JP Morgan, Credit Suisse
  Total Fines (DOJ) No fines imposed
  Total Fines (EC) €32.3 million
In October 2014, the European Commission (“EC”) found that four international banks operated a cartel on bid-ask spreads of Swiss franc interest rate derivatives .  Interest rate derivatives (e.g. forward rate agreements, swaps, futures, options) are financial products that are used by banks or companies for managing the risk of interest rate fluctuations.  The so-called “bid-ask spread” is the difference between the price at which a market maker is willing to sell and to buy a given product.  The EC’s investigation disclosed that between May and September 2007, the participants agreed to quote to all third parties wider, fixed bid-ask spreads on certain categories of short term over-the-counter Swiss franc interest rate derivatives, whilst maintaining narrower spreads for trades amongst themselves.  The EC imposed monetary fines against participating banks. 
Enforcement Highlights:
  • The EC imposed fines totaling more than €32.3 million on four international financial institutions.
Company Fine Date
RBS No fines imposed 10/21/2014
UBS € 12.7 million
JP Morgan € 10.5 million 10/21/2014
Crédit Suisse € 9.2 million 10/21/2014