EU antitrust regulators to probe syndicated loans

By Foo Yun Chee OXFORD, England (Reuters) – European antitrust regulators are to subject large financial services firms to detailed scrutiny as they examine the impact of syndicated loans on credit markets. “The fact that the (European) Commission is commissioning an investigation into a particular market does not in any way imply that there is anti-competitive conduct or that the Commission would open an investigation into that market,” spokesman Ricardo Cardoso said in an email on Monday. In Europe, bank loans have traditionally made up about 70 percent of loans to companies and other borrowers. That contrasts with the United States, where credit markets make up about 70-80 percent of where companies borrow. The European Commission said its interest was prompted by the growing importance of syndicated loans, in which institutional investors and banks lend to borrowers for a fee. Companies face fines of up to 10 percent of their global turnover for violating EU antitrust rules, and the bloc has fined banks including Deutsche Bank, JPMorgan, RBS, Citigroup and Societe Generale more than 1 billion euros ($1.1 billion) in recent years. Authorities around the world have taken a similarly tough stance on rate rigging and other violations. The inquiry is expected to last nine months and will focus on six countries, according to a tender for the study issued by the EU’s executive body, which did not name them. “The study will examine the structure and process of loan syndication, also in light of recent regulatory reforms aimed at increasing oversight and capital requirements,” Cardoso said. Parties wishing to conduct the study for the commission have until June 6 to submit their bids. (Editing by Philip Blenkinsop and Alexander Smith)