Rabobank Takes €26.6M Hit, Deutsche Bank Misses €156M Fine in Cartel Case

<p><br></p><p><span>The
European Commission has imposed a fine of €26.6 million on Rabobank. The
penalty comes from the bank's involvement in a trading cartel of
Euro-denominated bonds, an infringement shared with Deutsche Bank. However,
Deutsche Bank escaped fines by disclosing the cartel's existence under the
Commission's leniency program.</span></p>
<h1><span>European Watchdog Levies
Fine on Rabobank for Bond Trading Cartel</span></h1>
<p>Investigations
by the Commission <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5960" target="_blank" rel="nofollow">revealed </a>that between 2006 and 2016, traders from both banks
engaged in the illicit exchange of sensitive information. This <a href="https://www.financemagnates.com//">exchange</a>
directly influenced their trading and pricing strategies for Euro-denominated
Supra-Sovereign, Sovereign, Sub-Sovereign/Agency (SSA), and government-guaranteed
bonds within the European Economic Area (EEA). </p>
<p><span>The
traders, located at Deutsche Bank's EUR SSA desk in Frankfurt and Rabobank's
Investment Grade Bonds desk in London, utilized Bloomberg's various
communication tools to coordinate prices, trading volumes, and strategies,
including warnings about price levels.</span></p>
<p><a href="https://www.financemagnates.com/tag/deutsche-bank/" target="_blank" rel="follow">Deutsche
Bank's </a>cooperation with the Commission's investigation was rewarded with full
immunity, dodging a fine that could have reached nearly €156 million. In
contrast, Rabobank's lack of such cooperation resulted in its multimillion-euro
fine.</p>
<p><span>Commissioner
Didier Reynders, responsible for competition policy, emphasized the necessity
of "trustworthy and well-functioning bonds trading markets" for both
national authorities and investors. </span></p>
<p><span>"Today
we fine Rabobank for colluding with Deutsche Bank to distort competition when
trading certain Euro-denominated bonds," Reynders stated. He also assured
continued vigilance and commitment to preserving competition within financial
markets, highlighting the EU's staunch stance against anti-competitive
practices.</span></p>
<h2><span>Rabobank Is Not the First Lender to Be Fined</span></h2>
<p><span>The bond
market plays a crucial role in global finance, with entities leveraging bonds
for funding in international markets, trading them subsequently for investment
or other financial purposes. The Commission's actions are backed by EU and EEA
laws that stand against cartels and price collusion. The investigation, which
began in May 2017 following a tip-off by Deutsche Bank, led to a Statement of
Objections in December 2022, culminating in the current fines.</span></p>
<p>However,
<a href="https://www.financemagnates.com/tag/rabobank/" target="_blank" rel="follow">Rabobank </a>is not the first bank to be fined for attempts to manipulate the
European debt market. In 2019, Morgan Stanley faced a similar penalty imposed
by the French regulator for manipulations dating back to 2015. A year later, <a href="https://www.financemagnates.com/institutional-forex/regulation/morgan-stanley-accepts-175000-fine-from-finra-to-settle-charges/" target="_blank" rel="follow">it also accepted fine</a> for the same misconduct in the US.</p>
<p>Two years
ago, <a href="https://www.financemagnates.com/institutional-forex/nomura-considers-to-appeal-e129-million-european-antitrust-fine/" target="_blank" rel="follow">Nomura, UniCredit, and UBS</a> had to pay a combined total of €371 million for
their participation in a bond trading cartel where traders exchanged
confidential information through chat rooms.</p>
<p><br></p>

This article was written by Damian Chmiel at www.financemagnates.com.