1st Dec 2021

EU told to apologise to Credit Agricole over market rigging probe

  • Ex-Competition commissioner Joaquin Almunia created an 'impression of bias' when investigating the Euribor scandal, according to the EU Ombudsman. (Photo: European Commission)

The European Commission has been ordered to apologise to French banking giant Credit Agricole for implying its guilt in the long-running investigation into financial market rigging before the probe had been completed.

A report published on Thursday (13 March) by the EU Ombudsman Emily O’Reilly found that public statements by ex-commissioner Joaquin Almunia had “created a public impression of bias” by giving the impression that he had “already reached a conclusion about the bank’s alleged participation in the cartel before the investigation was complete.”

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In December 2013, a total of eight banks were fined a total of €1.7 billion for rigging the markets in financial derivatives, a year after a group of lenders were found guilty of manipulating the Libor and Euribor benchmark rates, which determine interest rates on a raft of different financial products.

At the time, Almunia, who left office in November, told reporters that the rate-rigging cases had changed his perception of financial markets, describing the “the collusion between banks who are supposed to be competing with each other," as “shocking”.

"Many financial institutions have demonstrated a lot of wrong-doing," he said.

While Credit Agricole was subjected to similar allegations, together with HSBC and JP Morgan, it rejected the accusations. Their investigation is still ongoing and is now in the hands of new Competition commissioner Margret Vestager.

However, Almunia stated that the French bank, and the two other banks, faced further sanctions after refusing to settle and indicated that the investigation was a done deal, telling the French Senate in January 2014 that “since we have a lot of information already, the investigation isn't the most difficult in the world.”

Two months later, Almunia told the European Parliament that “"We have three banks and a broker being investigated on the Libor/Euribor case because they didn't want to settle and we are preparing the statement of objections and the next step will follow”.

Coming several years after a banking crisis led to a global recession and a series of multi-billion euro public bailouts, the benchmark scandals raised the toxic public perception of banks to new levels.

In a press statement, O’Reilly commented that “the new Commission should acknowledge the maladministration that has occurred in this case under the previous Commission, apologise, and make sure that this does not happen again.

In July 2014, Crédit Agricole complained to the Ombudsman that Almunia infringed his impartiality obligation by indicating that he had already made up his mind as regards the bank's involvement in the cartel.

In response, Vestager’s spokesman Ricardo Cardoso said that the EU executive would "carefully analyse the report and respond to it in due course."

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