Forex Probe Results In Antitrust Complaint Against Credit Suisse

Credit Suisse has joined the list of major banks who have been pulled up by financial regulators in recent times.

European Union (EU) investigators recently confirmed that they are taking a closer look at Credit Suisse’s foreign exchange dealings. In a formal complaint, the EU accused the Swiss bank of executing anti-competitive practices when it came to forex trading. The complaint was received by Credit Suisse on July 26.

This is the latest blow to the bank and a follow-up to related probes in the United Kingdom, United States and in Switzerland.

These probes have already levied a total of $10 billion in fines and penalties on major banks such as HSBC, Barclays Bank Plc, Standard Chartered and JP Morgan and others as national governments have felt these banking firms colluded to manipulate the global market to unacceptable levels.

EU Investigation Catching Up

The EU has not been very forthcoming with information on the progress of its five-year probe but this recent filing is a sign that the investigation is finally coming to a close. The EU already fined a number of banks two years ago over their manipulation of the Libor and Euribor rates. Credit Suisse has confirmed receipt of the EU complaint and it can use the information to calculate how much of a potential fine it is likely to be hit with. The bank has the right to appeal the charges and set an oral hearing before the EU decides to impose an official fine.

Most of the banks that were under investigation have been very quiet about the probe and rumors of settlements have been floating around since 2016. Though no names were mentioned, both Barclays and HSBC announced in the past few years that they were under review by the EU, with lesser banks confirming that they were also being investigated.

Credit Suisse Might Take The Legal Route

Many banks did not discuss any settlement that they made with the respective financial regulators because they would have had to forfeit the 10 percent discount penalty if they released any information on the settlement. The public announcement of the complaint made by Credit Suisse could mean that the bank is willing to take the battle to court instead of reaching a quiet settlement.

The EU has already collected $2.3 billion in fines from banks that have violated forex rules. It will be interesting to see if Credit Suisse decides to take the legal route considering the fact that a Swiss court ordered the bank last month to submit transaction records to the country’s competition watchdog over allegations of collusion with several banks. The Swiss bank was the only bank to have challenged the court order and a decision is awaited on the matter.

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