Europe’s Large Banks Are Excluded from Bond Sales


June 15, 2021 | AtoZ MarketsThe European Union has decided to exclude from bond sales some of the major investment banks that have been involved in antitrust violations.

“The Commission will carry out a careful assessment of whether the major dealers found guilty of infringing antitrust rules have taken the necessary remedial action to put an end to these practices and are prepared to take steps to prevent their recurrence,” the European Commission said in a statement to Reuters.

Pending the completion of this assessment, these institutions will be admitted to the primary dealer network, but will not be invited to bid for individual syndicated transactions,” the entity explained.

EGBs are sovereign bonds issued in Euro by the central governments of the Eurozone Member States.

If the Commission’s preliminary view were confirmed, such behaviour would violate EU rules that prohibit anticompetitive business practices such as collusion on prices (Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement).

Which Banks Are Excluded

The Commission report did not specify which banks were excluded, but in previous years several cases have been known where about 10 of the largest banks in the European block have been involved.

For example, the Commission has fined banks such as Bank of America, Credit Agricole, Natixis, Nomura, Natwest Markets (formerly RBS) and UniCredit for violating antitrust rules by participating in bond cartels in two separate cases in April and May .

For its part, Deutsche Bank also participated in one of the scandals of these bonds cartels, but was not fined because it disclosed the cartel to the Commission.

In addition, Barclays, Citigroup, JPMorgan and Natwest were fined in 2019 for rigging the currency market.

These banks are part of the 39 primary operators in the EU, and they manage the largest bond sales in the area.

They are in charge of selling the debt directly to the final investors, receiving good commissions for this process.

What Did the Banks Said

Spokespeople for Nomura, BofA, Barclays, Natixis, Credit Agricole, NatWest, Deutsche Bank, UniCredit, Citi and JP Morgan all declined to comment.

The spokesperson said the banks “at some point” would rejoin the syndications. The Financial Times reported the news on Tuesday following a report by Refinitiv’s capital markets news service IFR on Friday.

The European Union on Tuesday raised 20 billion euros ($24.25 billion) from the first bond backing its recovery fund on the back of near-record demand.

That deal was led by joint lead managers BNP Paribas, DZ Bank, HSBC, IMI-Intesa Sanpaolo and Morgan Stanley, while Danske Bank and Santander are co-lead managers.

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