European Commission Investigating 8 Banks for Colluding on Bond Sales

European Commission Investigating 8 Banks for Colluding on Bond Sales

The European Commission said that it was investigating 8 Unnamed banks regarding breach of Antitrust rules by operating as a cartel in the buying and selling of European government bonds during 2007 to 2012. These banks have been illegally coordinating strategies for buying and selling European government bonds.

These bank traders have exchanged commercially sensitive information to coordinate trading strategies majorly in online chat rooms. These communication might have distorted the competition for sovereign bonds which have been issued by the governments of eurozone countries.

The commission said, “Such behavior would violate E.U. rules that prohibit anti competitive business practices such as collusion on prices.” The EU is investigating certain traders at eight banks and it does not imply alleged anti competitive conduct was a general practice.

The commission’s appointed antitrust authority haven’t named the eight banks, however they have been formally sent objections certificates to each one of them.

Earlier in December in an separate inquiry, the commission had notified four banks who were under the suspension of colluding in the trading of certain bonds denominated in United States dollars. This investigation involved supra-sovereign bonds which were issued by institutions like the European Investment Bank.

The EU further said that the banks can respond to the accusations and request an oral hearing to present their cases. If these allegation to be proved right with sufficient evidence against the banks, they will impose a fine of as much as 10 percent of their annual worldwide revenue.

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