Not Again! Goldman (GS), BofA (BAC), Others to Face Further CDS Scrutiny
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The European Commission is opening two antitrust probes looking into credit-default swaps for companies and sovereign debt. It will see whether 16 investment banks colluded by giving market information to financial information provider Markit, and will also investigate whether these firms struck a deal with ICE Clear Europe which blocked other clearinghouses from entering the market.
Investment banks to be looked at for possible collusion include Goldman Sachs Group (NYSE: GS), J.P. Morgan (NYSE: JPM), Bank of America (NYSE: BAC), Barclays (NYSE: BCS), and about 12 others.
Access to raw data for other information service providers may be shut off following the investigation. The EC said some of Markit's license and distribution agreements might be abusive and impede development of competition in the market for CDS information.
With regard to the ICE Clear Europe deals, the EC will look into whether or not favorable pricing terms and profit sharing arrangements were made, which would incentivize investment banks to only use ICE Clear Europe as their clearinghouse.
Most banking stocks are trading in negative territory Friday morning.
Investment banks to be looked at for possible collusion include Goldman Sachs Group (NYSE: GS), J.P. Morgan (NYSE: JPM), Bank of America (NYSE: BAC), Barclays (NYSE: BCS), and about 12 others.
Access to raw data for other information service providers may be shut off following the investigation. The EC said some of Markit's license and distribution agreements might be abusive and impede development of competition in the market for CDS information.
With regard to the ICE Clear Europe deals, the EC will look into whether or not favorable pricing terms and profit sharing arrangements were made, which would incentivize investment banks to only use ICE Clear Europe as their clearinghouse.
Most banking stocks are trading in negative territory Friday morning.
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