Banks accused of harming competition in swaps data

Tim Wallace
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A MAJOR banking industry body was yesterday accused by the European authorities of conspiring to shut down competition in the credit default swaps (CDS) market.

The European Commission claimed the International Swaps and Derivatives Association (Isda) may have tried to stop exchanges entering the market and providing CDS data.

“The commission’s inquiry found preliminary indications that Isda may have been involved in a coordinated effort of investment banks to delay or prevent exchanges from entering the credit derivatives business,” it announced yesterday.

“Such behaviour, if established, would stifle competition in the internal market in breach of EU antitrust rules.”

The investigation opened in April 2011 and suspects the banks could have monitored the market “to foreclose the development of certain CDS trading platforms. This could have been achieved through collusion or an abuse of a possible collective dominance,” the EC explained.

Isda denied wrongdoing.

“Isda is aware that it has been made subject to these proceedings,” the body said in a statement.

“Isda is confident that it has acted properly at all times and has not infringed EU competition rules. Isda is co-operating fully with regulatory authorities.”