Brussels - the EU competition watchdog investigated the practices of some of the largest banks in the world, as well as of a clearing house and a company financial data, in the market for credit default swaps.
The two probes home on a market which has come under fire for lack of transparency and of aggravation would have market turmoil during the financial crisis.
While the investigations relate to issues of competition, they accompany a regulatory crackdown more broadly in Europe and the United States on other derivatives and credit default swaps and could have an impact on the wider operation of the market. In this market, several companies control trillion dollars of financial instruments.
The Commission European said he studied if nine investment banks big, Barclays PLC and Goldman Sachs Group Inc., has received unfair preferential treatment - less as costs and benefits - of ice clear Europe deals and are therefore channelling their transactions only to the clearing houseby far the most important for the CDS in the EU.
"The effects of these agreements could be that other clearing houses have difficulties with success on the market and that other CDS players have no real choice where clear their transactions," said the Commission.
Targeted banks in the probe include also the Bank of America Corp., Citigroup Inc., Credit Switzerland Group, Deutsche Bank AG, JP Morgan Chase & Co., Morgan Stanley and UBS AG.
The probe comes as regulators on both sides of the Atlantic are pushing investors to settle CD and other derivatives transactions structured by clearing houses to improve the transparency of the market following the crisis. This thrust has allowed not only much larger business for homes by also of close relationships between banks and clearing platforms, as they scrambled to quickly implement a new system.
The nine banks scrutinized in the probe sold their platform of compensation to IntercontinentalExchange Inc., the parent company of ice clear Europe in 2009 and are shareholders in the United States of the compensation arms Exchange.
However, Commission officials said Friday that they had practical indications trade between the banks and the ice clear Europe is gone beyond of what is in written contracts. Officials refused to be named the policy of the Department.
In another case, the said Commission examines if these nine banks - and the other seven who act as dealers in the CDS market - give essential information on prices and other daily activities to Markit Group Ltd..the leading provider of financial data for this market.
Such preferential treatment "could be the result of collusion between them or an abuse of a possible collective dominance" and could block other CDS business data providers, the Commission said.
Seven other companies targeted in the probe are BNP Paribas SA, Commerzbank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC, Wells Fargo & Co., Credit Agricole SA and Societe Generale SA. All 16 banks are shareholders of Markit.
16 Banks involved in the probes control about 90 percent to 95 percent market brokers CD - where commercial banks with one another - and nearly 100% of transactions between dealers and small investors and businesses.
A monopoly on financial data, such as one owned by Markit CDS market, should allow more small players with worst of information on prices and ultimately a worse deal, a Commission official said. She also declined to be named.
Clearing houses and data providers are set to play a greater role in the CDS market, which is still relatively young and was mainly non-regulated before the financial crisis.
Credit default swaps were invented to help investors to protect themselves from the default value of a company or a Government whose obligations they hold. However, they have also been used for speculation, with banks and hedge funds trade CDS to earn money without actually owning the underlying bonds.
These "nu" sale CD came under control, since the price of CDS is often used to assess the underlying risk of the bond. At the height of the financial crisis, it was feared that speculation on CD both for the obligations of countries devastated by debt and mortgage-backed securities has been driving prices down and feed panic markets. Market players, however, say that there is no conclusive evidence of such a link.
"CDS play a useful role for financial markets and the economy," Joaquin Almunia, EU competition Commissioner, said in a statement. "Recent developments have shown, however, that the negotiation of this asset class undergoes a number of inefficiencies that cannot be resolved by the only regulations."
The Commission has decided to launch probes discovered after that regulators formal antitrust dubious commercial structures in their regular review of the CDS market, said officials of the Commission. Also, they have refused to be identified.
The U.S. Department of Justice in July 2009, said it was investigating possible anticompetitive practices in the credit derivatives clearing, industry information and Exchange services, a day after the Markit said, he has studied the market for credit default swaps.
Markit said Friday he "does not believe he has engaged in inappropriate behaviour and is pleased to have shown that the Commission.". A spokesman for IntercontinentalExchange, said that the company could cooperate with the investigation.
Barclays, RBC, Morgan Stanley, Bank of America, Citigroup, JPMorgan, Wells Fargo, UBS, Societe Generale and Commerzbank refused to comment on the investigation. Deutsche Bank, Goldman Sachs, Credit Switzerland, Crédit Agricole, BNP Paribas and HSBC did not immediately respond to requests for comments.
____
Pallavi Gogoi in New York, Frank Jordans in Geneva, Greg Keller Paris and David McHugh in Frankfurt contributed to this story.
没有评论:
发表评论