European Watchdog Accuses Banks Of Collusion

The EU's powerful anti-trust sheriff on Thursday accused eight banks of having conspired for several years to distort competition in the eurozone bond market.

According to the European Commission, the banks colluded to distort competition when buying and selling eurozone government bonds from 2007 to 2012, at the height of the financial crisis.

The Brussels-based commission refused to name the banks, but Credit Suisse, Credit Agricole and Deutsche Bank earlier revealed that they were in the EU's cross-hairs for bond trading collusion.

The accusation 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.

Much like those scandals, the commission said the collusion in this case took place "mainly -- but not exclusively -- through online chatrooms".

The EU, which is not bound by any legal deadline in the investigation, could impose a fine of up to 10 percent of each bank's annual turnover if its allegations are confirmed.

The Libor and other scandals resulted in massive fines, slashed bonuses and tighter regulation for the banking industry, putting a close to a free-wheeling era.

The cases had resulted in the payment of several hundred million euros in fines for large banks, as well as a number of lawsuits. (AFP)