Wall Street banks are accused of conspiring
Ten of the largest Wall Street banks are accused of conspiring to limit competition in the trading of interest rate swaps. In addition to financial institutions, collective action brought before the District Court in Manhattan, it is directed against two trading platforms.
Accused in the case are US Goldman Sachs Group, Bank of America Merrill Lynch, JPMorgan Chase and Citigroup, Swiss Credit Suisse Group and UBS, British Barclays and Royal Bank of Scotland, France's BNP Paribas and Germany's Deutsche Bank AG. They agreed to prevent the development of derivatives trading and other electronic platforms, similar to stock exchanges. As a result, financial institutions have successfully prevented the entry of new competitors from non-banking sector of the lucrative interest rate swaps, which are the second most traded type of derivatives worldwide. The total volume of the market is of the order of 320 trillion. dollar notes Reuters.
According to the indictment banks "have managed to extract billions of dollars in revenue from its monopoly position for years by the plaintiffs in the case." The lawsuit was filed by Chicago pension fund of teachers in public schools who purchased interest rate swaps from several banks to hedge interest rate risk by them in their duties. As a result of the unregulated negotiation between banks fund has paid an excessive price for the purchased interest rate swaps, the applicants claim.
The lawsuit states that at least from 2007 the banks' jointly threatened boycott, forced or otherwise eliminated any entity or procedure that had the potential to lead to the so-called exchange trading. Buy side investors. " This term means institutional investors such as mutual funds, pension funds and insurance companies usually buy large amount of securities and financial instruments for the purposes of managing the resources entrusted to them.
"The defendants did so with a simple purpose - to keep overtime to a profit center," said the indictment. Banks have masked the arrangements through the use of code names for joint projects such as "Lily", "Synthesis" and "Valkyrie," it said in the claim.