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Blacklisted banks to handle debt products again

EU has been forgiving of banks that once contained cartels


Pete Carvill

Four banks that were excluded from the first tranche of the EU’s recent bond sales have been chosen to manage the latest round of debt issuance from the European trading bloc.

According to reports in the FT and the California News Times; JP Morgan, Crédit Agricole, Deutsche Bank and UniCredit are now allowed to handle the five- and 30-year debt instruments.

According to the California News Times, the banks, “[…] were banned from participating in the first €20bn debt sale to fund the EU’s €800bn recovery fund earlier this month due to past antitrust violations”.

Back from the cold

The news must come as some relief to UniCredit, which was one of seven banks that found themselves in hot water earlier this year.

Back then, Expert Investor reported that it—along with Bank of America, Natixis, Nomura, Natwest, UBS, and Portignon—had had staff who formed a cartel to swap commercially sensitive information about the primary and secondary European Government Bond markets.

Of the seven banks caught out, three were collectively fined €371m. The remainder escaped fines because two fell outside of the statute of limitations, one had been proactive in informing the European Commission, and one had had no turnover in the previous business year.

Cleaning house

The four banks were allowed to participate in the latest round of debt issuance after evidence of ‘corrective action’ was submitted. Goldman Sachs, the fifth bank to trade, was not among the banned banks.

The EU has been forgiving in recent weeks of banks that once contained cartels. In June, the Wall Street Journal reported that a number of other institutions, including Citigroup, Bank of America, Barclays, and Nomura Holdings, were among those cleared to work on future bond sales.

The WSJ reported: “When the EU issued €20bn, equivalent to $24bn, of bonds on Tuesday to raise funds for a fiscal stimulus package, it excluded some of the world’s largest banks because of their participation in cartels in bond and currency markets in earlier years. The banks had been penalised for those actions in 2019 and 2021.”

It added: “The banks that have been cleared will be eligible to work on future issuances and were informed on Friday, the European Commission, which is the trade bloc’s executive arm, said by email.”