On 20 May 2021, the Commission found that Bank of America, Natixis, Nomura, RBS (now NatWest), UBS, UniCredit, and WestLB (now Portigon) participated in a cartel in the primary and secondary markets for European Government Bonds (EGB). The collusive behaviour lasted from 2007 to 2011, amidst a financial crisis and affected the European Economic Area in its entirety. 

Seven banks involved in European Government Bonds trading cartel during financial crisis

Nomura, UBS, and UniCredit were fined for EUR 371 million. NatWest, as the whistle-blower, was not fined, while infringements by Bank of America and Natixis fell outside the limitation period. Portigon received no fines as it did not generate any net turnover in the last available business year preceding the decision.

EGB are sovereign bonds issued by the central governments of the Eurozone member states and are used to raise funds in international financial markets. They are issued on the primary market, where a limited number of investment banks (“primary dealers”) can bid for the bonds in auctions or acquire them through syndication (a private placement process). The primary dealers can then trade EGB on the secondary market, either with each other or with other investors, such as asset managers, pension funds, hedge funds, and major companies.

Typically, large investment banks trade EGB within their EGB desk. The Commission found that the seven banks participated in a cartel through a group of traders working within the EGB desks. EGB traders were in regular contact in multilateral chatrooms on Bloomberg terminals, where their communications showed the following, intertwined and partially overlapping, conduct:

  1. attempts to influence the prevailing market price on the secondary market in the function of the conduct on the primary market—namely, traders exchanged information and attempted to coordinate their price strategies for driving the market price of an EGB;
  2. attempts to coordinate the bidding on the primary market;
  3. attempts to coordinate the level of overbidding on the primary market by disclosing information on the premium that traders intended to pay at an auction; and
  4. other exchanges of sensitive information.

EGB’s total market size is large. Based on data from the European Central Bank Securities Statistics, also cited by the EC Decision, the outstanding notional value of EGB in the primary market was EUR 4.4 trillion at the start of the infringement period, and increased to EUR 6.3 trillion by the end of the infringement period.

Individuals or companies affected by the anti-competitive behaviour have the right to seek damages from nation courts of EU member states.

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