Banks Facing Cartel Fines

CYPRIOT banks face fines of tens of millions of pounds if they are found guilty of operating an illegal cartel.
The Commission for the Protection of Competition (CPC) yesterday set September 5 as the date banks can submit their objections concerning the investigation into the alleged fixing of bank charges.
If found guilty, the nine commercial banks could face fines of up to 10 per cent of their annual turnover.
In April, the CPC launched a formal investigation into commercial banks in Cyprus following evidence that three of the island’s leading banks had allegedly formed a cartel.
The inquiry followed rumours alleging that Laiki Bank, the Bank of Cyprus and Hellenic Bank had colluded on policy and service charges and acted to regulate competition to the detriment of customers.
The CPC yesterday heard initial objections and set September 5 as the date banks could submit their pre-trial objections that will be considered three days later.
“It is a serious and complicated case and reasonable time is needed for involved parties to prepare,” CPC chairman Christodoulos Tselepos said.
Central Bank Governor Christodoulos Christodoulou yesterday intervened in the matter, warning that it was a sensitive issue that should be handled very carefully.
“Our banking system is not at its finest hour,” he added.
“Considering their limited profitability following the cuts in interest rates, great attention is needed in relation to any sanctions that could weaken them,” Christodoulou said.
The Governor stressed that he was not pre-empting any CPC decision and reiterated that great care was necessary as banks were not in their best financial shape.
He said the Central Bank had studied the commission’s preliminary findings and noted that at some stage of the procedure the Bank would be asked to confirm some of the data in the findings.
Commission Secretary Fanis Tryfonos said the banks would have until August 11 to ask for clarifications regarding any of the documentary evidence sent to the nine banks last month.
The next Commission meeting on the issue is scheduled for September 8.

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