EU Accuses 13 Banks of Hampering CDS Competition

Οι ρυθμιστικές αρχές της Κομισιόν κατηγορούν 13 τράπεζες (Bank of America Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Citigroup, Morgan Stanley, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, RBS και UBS) ότι παραβίασαν τους αντιμονοπωλιακούς κανόνες για την αγορά των CDS.

 

The European Commission has informed 13 of the world’s largest investment banks through a statement of objections that they infringed EU antitrust rules and distorted competition regarding credit default swap (CDS). The statement of objections is addressed to Bank of America Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Royal Bank of Scotland, UBS as well as the International Swaps and Derivatives Association (ISDA) and data service provider Markit.

Commission Vice President in charge of competition policy Joaquín Almunia stated: “It would be unacceptable if banks collectively blocked exchanges to protect their revenues from over-the-counter trading of credit derivatives.

Over-the-counter trading is not only more expensive for investors than exchange trading, it is also prone to systemic risks.”Between 2006 and 2009, Deutsche Börse and the Chicago Mercantile Exchange tried to enter the credit derivatives business. The exchanges turned to ISDA and Markit to obtain necessary licenses for data and index benchmarks, but, according to the preliminary findings of the Commission, the banks controlling these bodies instructed them to license only for “over-the-counter” (OTC) trading purposes and not for exchange trading.

Several of the investment banks also sought to shut out exchanges in other ways, for example by coordinating the choice of their preferred clearing house.Consequently, following a thorough investigation, the Commission takes the preliminary view that the banks acted collectively to shut out exchanges from the market because they feared that exchange trading would have reduced their revenues from acting as intermediaries in the OTC market.

In 2013, the gross notional value of the almost 2 million active CDS contracts exceeded € 10 trillion.

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