Rabobank fined €26.6m by EU over bond cartel

The European Commission said it has fined Dutch bank Rabobank €26.6 million for participating in a cartel “concerning the trading of certain Euro-denominated bonds, together with Deutsche Bank.”

The Commission said Deutsche Bank cooperated under its leniency programme and therefore received full immunity from fines for revealing the cartel — avoiding a fine of almost €156 million.

“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),” said the Commission.

“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.”

EU antitrust chief Didier Reynders said in a statement: “Trustworthy and well-functioning bonds trading markets are crucial not only for the national authorities issuing bonds but also for the investors buying and trading.”

Rabobank said in a statement: “On 22 November 2023, the European Commission announced that it was fining Rabobank EUR 26.6 million in connection with certain historic communications between a small number of individuals at Deutsche Bank and Rabobank, which the Commission has concluded breached EU competition law.

“The bank has cooperated with the Commission’s investigation throughout and is disappointed by the outcome as announced today.
“Rabobank is considering lodging an appeal. The amount of the fine has already been provisioned for in the 2022 financial statements.

“Rabobank seeks to maintain a strong culture of compliance across its business and employees worldwide, including in relation to competition law, and considers its obligations in this regard to be of the utmost importance.”