EU raids eight banks in exchange rate probe
Wednesday 17 February 1999
The European Commission said it also sent letters to banks in virtually all of the 11 nations demanding information on their tariffs. The move is the most dramatic evidence yet of concern in Brussels that consumers are not benefiting from one of the main selling points of the euro - the locking of exchange rates.
Karel Van Miert, Europe's Competition Commissioner, was seeking evidence to support claims of collusion and anti-competitive behaviour among banks. Mr Van Miert told journalists that the banks raided were Deutsche Bank AG, Dresdner Bank AG, Credit Agricole, Societe Generale, Banca Commerciale Italiana, Cassa di Risparmio delle Province Lombarde SpA, Banco Bilbao Vizcaya SA and Argentaria Corp Bancaria de Espana SA.
The commission added that the investigators were "not made especially welcome in some places", citing France as an example. Since January the commission had, he said, received indications that "some kind of concertation" was taking place, perhaps through national banking associations and at the European level.
Mr Van Miert added that he singled out the eight banks that were raided because "a choice had to be made" and there was a "likelihood" evidence would be found.
Transaction charges have become especially controversial because the advent of the euro has ended the publication of different rates for buyers and sellers. Banks argue that the differential between the two rates allowed them to make a profit from the transaction - something that now has to be done solely through commission charges. However, investigations by members of the European Parliament suggest some commissions have been as high as 3.75 per cent.
A Deutsche Bank spokesman admitted that two members of the commission's anti-trust committee and one representative of the German federal anti- trust office had paid the bank an "informational" visit.
"They inquired how we determine charges for exchanging national currencies and we provided information. There was no raid," a spokesman said. The spokesman also denied the allegation, saying there had not been collusion over the charges. "The setting of our 3 per cent surcharge for currency exchanges has been a normal decision-making process," he said.
Banco Bilbao Vizcaya SA said it was confident it would be vindicated, adding that its commission charges were the minimum.
The commission is worried about the reaction of travellers in the eurozone, as they realise the benefits of the single currency are slow to materialise.
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