The previous eight banks Banned After promising “integrity” and providing evidence of “remedial measures” after historical violations of antitrust rules, the bond sales of the EU’s 800 billion euro recovery fund have been approved to process future transactions.
Earlier this week, the European Union launched the largest lending boom in its history, issuing 20 billion euros of bonds, but due to previous scandals involving market manipulation, 10 banks were unable to participate in the transaction. The European Commission stated that eight of the lenders are now free to deal with future bond syndicates under the plan.
According to people familiar with the matter, these banks are Deutsche Bank, Credit Agricole, JPMorgan Chase, Citigroup, Barclays Bank, UniCredit, Bank of America and Nomura Securities. The person said that NatWest and Natixis will continue to be excluded for the time being because they have not yet provided relevant information to the EU. Both banks declined to comment.
The European Commission said in a statement: “The information provided by these eight banks enables the Commission to conclude that it is unnecessary for them to be further excluded from participating in syndicated transactions for EU bond issuance,” adding that the decision It is in “a comprehensive analysis taking into account the remedial measures taken by the relevant agencies.”
The banker stated that the “remedial measures” included evidence of how the bank supervised the activities of chat room traders, as well as a document called a “statement of honor” that stated compliance with a series of EU standards.
As the Recovery Fund transforms Brussels into one of the largest borrowers in the region, banks that are excluded from EU transactions may miss a major new source of fees on the European bond market. The commission paid a fee of 20 million euros in the first transaction on Tuesday.
Bank of America, Natixis, Nomura Securities, NatWest and UniCredit were prevented from participating in the EU syndicate due to the European Commission’s antitrust ruling last month. They participated in the bond trading cartel during the Eurozone debt crisis ten years ago.
Citigroup, JPMorgan Chase and Barclays Bank, as well as NatWest, were banned two years ago after they were found to have participated in currency market manipulation between 2007 and 2013. Deutsche Bank and Credit Agricole were also excluded because they participated in the April ruling on a different bond trading cartel.
According to data from Dealogic, the banks that were initially excluded from the syndication include 7 of the 10 European government and supranational debt largest banks sold this year.
All 10 banks are on the list of 39 “primary dealers”-these banks participate in the EU’s regular debt auctions that will begin in September.
The responsibility of bidding in auctions can sometimes prove to be expensive, so banks usually treat syndication fees as a sweetener to gain primary dealer status.