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Brussels accuses Rabobank and Deutsche Bank of manipulating the debt market

On Tuesday, the European Commission accused the German banks Deutsche Bank and the Dutch Rabobank of coordinate to manipulate various segments of the bond market, including public debt denominated in euros, it is stated in the press release of that institution. The Community’s executive body has informed both financial entities of this preliminary conclusion by sending a statement of objections and will now draft one an in-depth investigation to determine if your suspicions are truewhich could lead to the imposition of millions of fines.

In particular, Brussels believes that Deutsche Bank and Rabobank exchanged money sensitive commercial information between 2005 and 2006, a period in which they also coordinated their pricing and marketing strategies in the secondary bond market within the European Economic Area. Communication between both entities took place mainly by road e-mail and virtual chat systems, as revealed by the initial investigations of the European Commission’s competition services.

Deutsche Bank and Rabobank developed these practices in both the public and regional debt markets, privately guaranteed bonds, publicly guaranteed debt, debt issued by supranational institutions such as the EIB, and bonds issued by countries with a different law or currency than their own. own. “If the Commission’s preliminary opinion is confirmed, this behavior would constitute a violation of EU rules prohibit anti-competitive business practices such as price agreements or other market conditions,” Brussels warns.

Community authorities also point out that they initially “explored the possibility” of reaching an agreement with the two affected financial entities to resolve the case, but they decided to continue with the investigation due to the “lack of progress”. The European Commission warned that sending a statement of objections “does not prejudge the outcome of the investigation”, but reminded that it could lead to fines up to 10% of global revenue banks if it confirms their initial suspicions after the subjects have exercised their right of defence.

This is the third investigation by the Community Executive Board the existence of cartels on the bond market. In April 2021, it fined three investment banks 28 million euros for manipulating the dollar debt market, and a month later imposed sanctions worth 371 million after concluding that another group of entities coordinated their behavior in the bond market. The companies fined for these decisions were Bank of America Merrill Lynch, Crédit Agricole and Crédit Suisse, in the first, and Nomura, UBS and UniCredit, in the second.

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