Rabobank fined €26.6 million for colluding with Deutsche Bank on government bonds

The European Commission fined Rabobank 26.6 million euros for cartel formation with the Deutsche Bank on the trading of bonds. According to the EC, the banks made secret agreements on the prices and conditions for trading the bonds. The Deutsche Bank wasn’t fined because it reported the cartel to the EC under a leniency program.

According to the ECC, the banks “exchanged commercially sensitive information and coordinated their trading and pricing strategies” through some of their traders between 2006 and 2016.

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 them,” said Commissioner Didier Reynders, in charge of the competition policy. “Today, we fine Rabobank for colluding with Deutsche Bank to distort competition when trading certain Euro-denominated bonds. We will remain vigilant and committed to preserve effective competition in financial markets.”

The traders operated at Deutsche Bank’s EUR SSA desk in Frankfurt and Rabobank’s Investment Grade Bonds desk in London. The bonds involved were Euro-denominated SSA bonds and Government Guaranteed bonds traded in the European Economic Area.

When determining the fine, the EC considered the value of the involved bonds, the serious nature of the infringement, its geographic scope, and its duration. “Deutsche Bank cooperated with the Commission under the leniency program and therefore received full immunity from fines for revealing the cartel,” the EC said.

Deutsche Bank avoided a fine of almost 156 million euros. Rabobank received a fine of 26.6 million euros.