Eight banks first prohibited from participating in the sale of bonds for the EU recovery fund of 800 billion euros were eliminated to manage future transactions after promising “integrity” and providing evidence of “corrective measures” after the historical violations of antitrust rules.
The EU launched its largest loan spree ever before this week with a € 20 billion bond sale, but 10 banks have been frozen from working on the deal due to their previous involvement in scandals of market rigging. Eight of those funders are now free to manage future bond syndicates in the program, the European Commission said.
The banks are Deutsche Bank, Crédit Agricole, JPMorgan, Citigroup, Barclays, UniCredit, Bank of America and Nomura, according to a person familiar with the matter. NatWest and Natixis will continue to be excluded for the time being because they have not provided relevant information to the EU, the person said. Both banks declined to comment.
“The eight banks have provided information that will allow the Commission to conclude that its further exclusion from participation in syndicated transactions in the issuance of EU bonds is not justified,” the Commission said in a statement. , adding that the decision came after “an in-depth analysis considering the remedial measures applied by the institutions concerned”.
The “corrective measures” included evidence of how banks monitor the activities of chat room traders, as well as a document called a “declaration of honor” affirming adherence to a set of EU standards, bankers say. .
Banks excluded from EU agreements run the risk of missing a new main source of taxes in European bond markets, as the recovery fund transforms Brussels into one of the region’s largest entrepreneurs. The Commission paid 20 million euros in fees for Tuesday’s inaugural transaction.
Bank of America, Natixis, Nomura, NatWest and UniCredit have been barred from participating in EU syndications because of an antitrust commission that decided last month that they participated in a bond trading cartel during the EU crisis. eurozone debt a decade ago.
Citigroup, JPMorgan and Barclays, in addition to NatWest, were banned after a two-year discovery that they were involved in the manipulation of the foreign exchange markets between 2007 and 2013. Deutsche Bank and Crédit Agricole were also excluded because of an April decision that they were involved in a different bond trading cartel.
Banks initially excluded from syndication included seven of the 10 largest in European government volume and supranational debt sold this year, according to Dealogic figures.
All 10 banks are on a list of 39 “primary retailers” – banks participating in regular debt auctions, which the EU will launch in September.
The responsibility of proposing the auction can sometimes prove costly, so banks generally view syndication costs as a sweetener to take on the status of primary reseller.