Interest rates, currencies, precious metal prices: there have been many adjustments that bankers have been able to tamper with in the past twenty years – mostly to enrich themselves and usually at the expense of customers. The dealers talked to each other about this, the management team supposedly rarely if ever noticed anything about it. In the end, numerous large financial institutions paid many billions of euros in penalties for illegal transactions. The most expensive offence: the manipulation of the Libor reference interest rate. Almost ten years ago, Deutsche Bank paid a $2.5 billion fine to US authorities, along with an EU antitrust fine of €725 million.
However, the chapter on “illicit collusion” is not yet completely closed. The EU competition authority has surprisingly opened antitrust proceedings against Deutsche Bank and the Dutch Rabobank: Blame the EU competition watchdog the largest German money house and the Dutch institute to have agreed on trading in euro government bonds and other comparable bonds.
It is about the period from 2005 to 2016, in which traders from the two financial institutions are said to have coordinated trading in euro bonds, primarily by e-mail and messenger services. In contrast to almost ten years ago, Deutsche Bank is apparently not expecting a fine in this case: it has worked with the European Commission and is therefore receiving “conditional immunity from fines,” said the bank. Accordingly, Deutsche Bank’s share price fell only slightly on Tuesday. Rabobank said it was cooperating with the authorities. According to reports, Deutsche Bank itself reported and investigated the events in 2016. The responsible dealer was released.
Why the investigation is taking so long remained unclear, but is apparently not uncommon in such cases. The EU Commission announced that it had initially tried to find a comparison with the banks. Since there had been no progress, she had now initiated the antitrust proceedings. According to Frankfurt financial circles, the lack of cooperation was attributed to Rabobank, which declined to comment.
The investigation is the third EU investigation into cartels in the bond market. In April 2021, the Commission fined four investment banks a total of €28 million for their participation in a US dollar bond trading cartel. Deutsche Bank was the only one of the financial institutions to go unpunished. In May 2021, Brussels found that seven investment banks were involved in a cartel to trade in European government bonds and imposed fines totaling €371 million. According to reports, further investigations are still pending.