© Reuters. Brussels accuses Deutsche Bank and Rabobank of manipulating the debt market
Brussels, Dec 6 (.).- The European Commission accused German banks on Tuesday Deutsche Bank (ETR:) and Dutch Rabobank to coordinate to manipulate various segments of the bond market, including euro-denominated government debt, the institution said in a statement.
The Community Executive has informed both financial entities of this preliminary conclusion by sending a statement of objections and will now carry out an in-depth investigation to determine if their suspicions are true, which could lead to the imposition of million-dollar fines.
In particular, Brussels believes that Deutsche Bank and Rabobank exchanged sensitive business information between 2005 and 2006, during which time they also coordinated their pricing and trading strategies on the secondary bond market within the European Economic Area.
Communication between both entities took place mainly through emails and virtual chat systems, as revealed by the initial investigations by the European Commission’s Competition services.
Deutsche Bank and Rabobank developed these practices in both the public debt market and the regional debt market, private guaranteed bonds, public guaranteed debt, debt issued by supranational institutions such as the EIB and bonds issued by States with a different law or currency than their own.
“If the Commission’s preliminary opinion is confirmed, this behavior would violate EU rules that prohibit anti-competitive business practices such as price collusion or other marketing conditions,” Brussels warns.
The community authorities also point out that at first they “explored the possibility” of reaching an agreement with the two financial entities affected to resolve the case but decided to continue with the investigation due to the “absence of progress.”
The European Commission warned that sending the statement of objections “does not prejudge the outcome of the investigation”, but recalled that it could lead to fines of up to 10% of the global income of the banks if it confirms its initial suspicions after the entities have exercised their right of defense.
This is the third investigation of the Community Executive for the existence of cartels in the bond market. In April 2021, he fined three investment banks 28 million euros for manipulating the dollar debt market and a month later he imposed sanctions worth 371 million after concluding that another group of entities had coordinated their behavior in the bond market. Europeans.
The firms fined for these decisions were Bank of America (NYSE:) Merrill Lynch, Crédit Agricole (EPA:) and Crédit Suisse, in the first, and Nomura, UBS (SIX:) and UniCredit (BIT:), in the second.
(More information on the European Union at euroefe.euractiv.es)