Banks accused of colluding to protect Euro credit derivatives revenue

BRUSSELS, July 1 (UPI) -- Antitrust regulators in Europe charged 13 large banks Monday with colluding to prevent new competitors from entering the credit derivatives market.

The European Commission said the banks, market research firm Markit Economics and the International Swaps and Derivatives Association colluded to block Deutsche Borse and CME from entering the market.

The commission said Markit Economics, the trade association and the 13 banks worked together from 2006 through 2009 to prevent the exchanges from entering the market.

"It would be unacceptable if banks collectively blocked exchanges to protect their revenue from over-the-counter trading of credit derivatives," antitrust Commissioner Joaquin Almunia said.

Credit derivatives act like insurance, as they pay off if an underlying security or bond defaults.

The New York Times reported Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland, UBS and collapsed investment firm Bear Stearns were named as taking part in the collusion.