European Union Probing Goldman, Others On Credit Default Swaps (GS, JPM, CS, BAC, MS)

According to the Reuters report, the European Union is probing major banks all around the world over credit default swaps, and has opened two antitrust investigations on the matter. The European Commission said today it would investigate whether 16 investment banks and CDS market information provider Markit colluded, or potentially even abused their market position. The banks being probed are JP Morgan JPM, Bank of America Merrill Lynch BAC, Barclays BCS, BNP Paribas, Citigroup C, Commerzbank, Credit Suisse First Boston CS, Deutsche Bank DB, Goldman Sachs GS, HSBC HBC, Morgan Stanley MS, Royal Bank of Scotland RBS, UBS UBS, Wells Fargo Bank/Wachovia WFC, Credit Agricole and Societe Generale. In addition to this probe, the EU said it would be opening an additional probe on 9 of the banks, and ICE Clear Europe, a CDS clearing house owned by InterContinental Exchange ICE to see if the moves made by tariffs hurt competition. The commissioner of antritrust cases, Joaquin Alumnia said, "CDSs play a useful role for financial markets and for the economy." "Recent developments have shown, however, that the trading of this asset class suffers a number of inefficiencies that cannot be solved through regulation alone," Alumnia went on to say. "This could be the consequence of collusion between them or an abuse of a possible collective dominance and may have the effect of foreclosing the access to the valuable raw data by other information service providers," the Commission said in a statement.