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EU hits major banks for rates rigging

Major US and European banks have been fined for forming cartels and rigging interest rates. The European Commission said the "economy needs a healthy, transparent, well-functioning financial sector."

The European Commission slapped multi-million euro fines on three leading global banks on Tuesday for rigging international interest rates.

US investment bank JP Morgan was charged almost 62 million euros ($79 million) for colluding with the Royal Bank of Scotland to fix the Libor benchmark rate for the Swiss franc.

Libor, which stands for London Interbank Offered Rate, is the rate banks charge each other for short-term loans.

The EU executive also found that JP Morgan operated a cartel with RBS and Swiss banks UBS and Credit Suisse to influence derivatives on financial markets. Together the banks - excluding RBS, which got off scot free for alerting the Commission to the scams - face a joint penalty of 32.3 million euros.

EU chasing banks hard on misdeeds

EU slaps record fine on Deutsche Bank, Citigroup, JP Morgan

The European Commission has been coming down hard on banks which have cheated markets.

EU Competition Commissioner Joaquin Almunia slammed the lenders as one more example of major banks colluding with each other "instead of competing."

He said antitrust regulations had to be strictly enforced in the financial sector because the economy needs it to be "healthy and transparent."

The Royal Bank of Scotland, which was a part of the schemes, would have faced charges of 110 million euros had it not blown the whistle on the cartel.

JP Morgan's fine was reduced for cooperating with the investigation. It is not the bank's first penalty: only a year ago it reached a $13 billion settlement with the US Securities and Exchange Commission for its role in the sub-prime mortgage disaster, which precipitated the global financial crisis in 2008.

bew/cjc (AFP, dpa, EU Commission)