Brussels (Brussels Morning Newspaper) – Credit Suisse and Credit Agricole failed their first challenges against million-euro fines issued by the EU Commission in 2021 for taking part in a bond cartel.
The European Commission fined Bank of America Merrill Lynch, Crédit Agricole, and Credit Suisse a total of € 28 494 000 for violating EU antitrust regulations. Deutsche Bank was not fined as it indicated the existence of the cartel to the EU Commission. The four banks engaged in a cartel in the secondary trading market within the European Economic Area of Supra-sovereign, Sovereign and Agency (SSA) bonds denominated in US Dollars.
How did the EU Commission uncover the bond cartel activity?
According to the commission, the four investment banks partook in a cartel through a core group of traders operating in their USD SSA bonds divisions, who were in regular touch with each other. A bond is a kind of debt security that allows entities to raise cash. Bonds are issued on the primary market and then dealt with by financial institutions on the secondary market. On the secondary market, potential customers, such as investment and pension funds, approach the banks to get an independent quotation of the cost and quantity available of the bonds of a specific issuer. Bonds are determined by currency. This particular case refers to SSA bonds issued in US dollars.
How did the EU court rule on the bond cartel case?
The Luxembourg-based General Court preferred the EU competition enforcer. “The General Court of the European Union affirms the Commission’s finding of an infringement and holds the amount of the fines imposed in 2021,” the tribunal stated. Traders at the four banks conspired on trading strategies, exchanged liable pricing information and blended prices over five years via chatrooms on Bloomberg terminals, according to the Commission.
