Deutsche Bank, Credit Agricole, Credit Suisse charged by EU over alleged bond trading cartel

Deutsche Bank has paid more than US$3 billion to resolve investigations it manipulated benchmark interest rates including Libor which are used to price loans and contracts around the world. PHOTO: REUTERS

BRUSSELS (REUTERS) - Deutsche Bank, Credit Agricole, Credit Suisse and another bank have been charged by European Union antitrust regulators for being in a bond trading cartel.

In the latest blow to the reputation and public image of the banking sector in Europe, which has faced billions of euros in fines for rigging interest rate benchmarks, the European Commission on Thursday (Dec 20) did not name the banks it had charged.

However, the Commission said its investigation focused on the conduct of certain traders at the four banks and contact between them, largely through online chatrooms.

If found guilty of breaching EU antitrust rules the banks could face fines up to 10 per cent of their global turnover, although Deutsche Bank said it had proactively cooperated with the investigation and did not expect a financial penalty.

Whistleblowers are not sanctioned under EU rules.

Deutsche Bank, whose shares were down 5.6 per cent by 1455 GMT, has paid more than US$3 billion to resolve investigations it manipulated benchmark interest rates including Libor which are used to price loans and contracts around the world.

Credit Agricole, which received a 114.6 million euro EU fine in 2016 for being part of a Euribor cartel, confirmed it had received the EU charge sheet and its shares were trading 3.4 per cent lower by 1500 GMT.

Credit Suisse said it was cooperating with the EU antitrust enforcer and that the case related to trading by a single employee who had left the Swiss bank in early 2016. Its stock fell 3.5 per cent.

"The four banks exchanged commercially sensitive information and coordinated on prices concerning US dollar denominated supra-sovereign, sovereign and agency bonds, known as 'SSA bonds'," the Commission said in a statement.

Regulators worldwide have penalised the financial industry billions of euros in recent years for rigging various financial benchmarks. In most cases, online chatrooms had helped regulators to uncover the manipulation.

The latest case could expose the banks to investor litigation, Simon Hart, a partner at law firm RPC, said.

"If there has been collusion ... then this opens up the real possibility of claims by investors in those markets who were adversely affected," Mr Hart said.

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