Brussels accuses eight banks of ‘acting like cartel’ during European crisis

Brussels has accused eight unnamed banks of colluding in the buying and trading of eurozone government bonds at different times between 2007 to 2017.

It’s more than likely that none of the banks concerned are Portuguese – but the relevance for this country is that this alleged collusion “coincides with the financial crisis and the sovereign debt crisis” that saw so many southern European countries – Portugal included – forced into seeking crippling ‘bailouts’.

Thus if it can be proved that traders at eight different banks exchanged information and coordinated trading strategies for euro-dominated bonds issued by eurozone member states during the decade in question, the fallout could be phenomenal.

For now, we simply have the details that the European Commission “considers eight banks acted in collusion and violated rules of competition in the negotiation of public debt securities of European countries”, writes Dinheiro Vivo.

Anonymous for the time being, the banks have all been ‘notified’ of Brussels’ decision to move forwards with the accusations.

They will now have time to study Brussels’ cases against them, and respond to them.

Penalties could reach 10% of the global receipts generated by these banks, says DV.

Hundreds of millions of euros, in other words.

Adds AFP news agency, today’s news “deals a fresh blow to the banking industry which has spent years recovering from a series of crisis-era scandals, including manipulation of the Libor lending rate and other key benchmarks”.

As with those scandals, these latest accusations are understood to centre on collusion that “took place mainly – but not exclusively – through online chatrooms”.

The Libor and other scandals resulted in “massive fines, slashed bonuses, tighter regulation for the banking industry” and “a number of lawsuits”.

Brussels has stressed it has no time limit on its investigations, as these depend on the “complexity of the (different) cases”.

natasha.donn@algarveresident.com