EU accuses eight banks of forming eurozone bond cartel

Deutsche Bank is in the EU’s cross-hairs for bond trading collusion. — Reuters pic
Deutsche Bank is in the EU’s cross-hairs for trading collusion. — Reuters pic

BRUSSELS, Jan 31 — The EU’s powerful anti-trust sheriff today accused eight banks of having conspired for several years to distort competition in the eurozone bond market.

According to the European Commission, the banks colluded to distort competition when acquiring and selling eurozone government bonds in periods from 2007 to 2012, at the height of the financial crisis.

The Brussels-based commission refused to name the banks, but , Credit Agricole and Deutsche Bank earlier revealed that they were in the EU’s crosshairs for bond trading collusion.

The accusation deals a fresh blow to the industry which has spent years recovering from a series of crisis-era scandals including manipulation of the Libor lending rate and other key benchmarks.

Much like those scandals, the commission said the collusion in this case took place “mainly — but not exclusively — through online chatrooms”.

The EU, which is not bound by any legal deadline in the investigation, could impose a fine of up to 10 per cent of each bank’s annual turnover if its allegations are confirmed.

The Libor and other scandals resulted in massive fines, slashed bonuses and tighter regulation for the banking industry, putting a close to a free-wheeling era.

The cases had resulted in the payment of several hundred million euros in fines for large banks, as well as a number of lawsuits. — AFP

Source: The Malay Mail Online

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