EU Probes Show Finance Industry Lacks Transparency, Almunia Says

European Union investigations into Libor rates and the credit-default swap market show the financial industry has a “worrying” lack of transparency, the European Union’s competition chief said.

“As long as the industry remains so opaque, the temptation will also remain to flout competition rules,” EU Competition Commissioner Joaquin Almunia said in a speech in Melbourne today. “And when companies yield to it, the European Commission will intervene. The industry needs a genuine change of culture.”

The EU regulator in Brussels is investigating possible collusion between Markit Group Ltd. and 16 investment banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. after suspending a parallel probe into clearing deals between nine of the lenders and ICE Clear Europe.

Almunia said today that the EU regulators in their probe of the credit-default swap market “want to make sure that a number of large investment banks have not prevented the development of trading platforms for CDS.”

Separately, the commission is also probing manipulation of benchmark interest rates such as the London Interbank Offered Rate and Euribor. Deutsche Bank AG, JPMorgan Chase & Co., Barclays Plc, HSBC Holdings Plc and Royal Bank of Scotland Group Plc have all said they were quizzed by the EU over benchmark interest rates.