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.