The European Commission has fined Rabobank €26.6 million for participating in a cartel concerning the trading of certain Euro-denominated bonds, together with Deutsche Bank.
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Deutsche Bank was not fined as it revealed the cartel to the Commission under the leniency programme.
The products concerned by the cartel are Euro-denominated SSA bonds (Supra-Sovereign, Foreign Sovereign, Sub-Sovereign/Agency bonds) and Government Guaranteed bonds traded in the European Economic Area (‘EEA').
The Commission investigation revealed that between 2006 and 2016 the two banks, through some of their traders, exchanged commercially sensitive information and coordinated their trading and pricing strategies.
The traders operated at Deutsche Bank's EUR SSA desk in Frankfurt and at Rabobank's Investment Grade Bonds desk in London.
They used Bloomberg emails, instant messages and online chatrooms to exchange information concerning:
(i) prices, volumes as well as current and future trading strategies and positions;
(ii) the counterparties' identities; and
(iii) their requirements for buying or selling bonds.
Traders adjusted their price levels and trading strategies based on these exchanges.
This included inter alia coordination on prices to be offered and displayed on Bloomberg AllQ (all quotes for bonds) screens, which is a dealer-to-client electronic trading platform, and mutual warnings when the other bank's indicative price on screen was considered to be too low or too high.
Deutsche Bank cooperated with the Commission under the leniency programme and therefore received full immunity from fines for revealing the cartel, thereby avoiding a fine of almost €156 million. Rabobank received a fine of €26.6 million. ■
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