Brussels accuses eight banks of manipulating the sovereign bond market in full crisis of public debt

Brussels accuses eight banks of manipulating the sovereign bond market in full crisis of public debt


MadridUpdated:

After the cases of manipulation of the Euribor and the Libor and that ended in millionaire fines banking giants such as Deutsche Bank, Barclays, Royal Bank of Scotland (RBS), Société Générale, JP Morgan and Citigroup, the European Commission is now investigating another possible case of market manipulation, this time the sovereign bond. The Community Executive has sent statements of charges to eight financial entities whose identity has not disclosed to the ones that accuse of practices for distort competition in the public debt market issued by the countries of the Eurozone between 2007 and 2012, a period that comprises the sovereign debt crisis and that shook mainly countries like Greece, Ireland, Portugal, Spain and Italy.

Brussels suspects the eight banks participated during those years in a collusive scheme with the aim of distorting the competition to acquire and trade European public bonds, denominated in euros and issued by the central governments of the partners of the single currency. The operators that worked for these banks exchanged sensitive information via digital channels and coordinated their strategies.

If the European Commission's investigation concludes that there is sufficient evidence that these practices have violated European competition rules, The Executive could impose a fine on each bank of up to 10% of its worldwide income. However, Brussels clarifies that its investigation involves the operators used by eight specific banks and, therefore, does not imply that the conduct is "a widespread practice" in this market.

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