While 10 of the world's largest megabanks (primary retailers responsible for selling and creating markets for European sovereign debt) were already drooling at the opportunity to make easy money by selling bonds linked to the EU Recovery Fund – bonds that grant a slight German bund award with the same AAA rating – Brussels abruptly announced that these institutions, including Barclays, JP Morgan, Citigroup and Bank of America, would be excluded from the placement agreements.
The reason? According to Bloomberg, the move was a "punishment" for these institutions' past transgressions in manipulating the European government bond markets, including those related to manipulations of the Euribor and Libor. Regulators in the UK, EU and US have investigated and prosecuted banks and administrators for these offenses.
For years, scandal after financial scandal in Europe have damaged the reputation of the continent's regulators and executors, such as the Danske Bank-led money laundering system, the Greensill collapse and other issues. Now, continent regulators are finally showing regulating banks that there will be consequences for bad behavior.
The ban on participation in the placement of these securities will continue at least until a settlement agreement is reached between the commission and the credit institutions. All this, however, is changing the balance between credit institutions in the great continent: yesterday 20 billion of highly attractive, safe, but with a positive yield, securities were placed with medium-sized national institutions. A redistribution of power that this culture has damaged the great.
The article The Commission punishes 10 big banks: out of the recovery bond market comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-commissione-punisce-10-grandi-banche-fuori-dal-mercato-del-recovery-bond/ on Thu, 17 Jun 2021 06:00:14 +0000.