The European Commission has fined six German banks more than €100 million (£79 million) for conspiring to keep exchange rate charges on euro-zone currencies artificially high.
Dresdner Bank, Commerzbank and Bayerische HypoVereinsbank were fined €28 million each and the Deutsche Verkehrsbank (DVB) was fined €14 million. The fines were based on the size of the banks, with a smaller bank, the Vereins-und-Westbank, fined €2.8 million.
The Commission said the banks agreed in 1997 to impose a 3 per cent charge on euro-zone foreign exchanges. They deliberately did not pass on to customers the lower cost of euro-zone currency transfers, something the Commission called "a clear violation of European antitrust rules".
"This behaviour was illegal, caused direct and irreparable damage to consumers and also gave a blow to citizens' confidence in the European single currency," said Mr Mario Monti, the Competition Commissioner.
"I am disappointed that the five banks did not reduce their charges . . . as was done by other banks in Germany and in other member-states," he said. Three of the banks, Commerzbank, HypoVereinsbank and DVB, said yesterday they would appeal the fine.
In early 1999, the Commission began investigating allegations that banks in seven states, including Ireland, agreed to fix bank charges on euro-zone foreign exchange. The agreed charges would "recover about 90 per cent of the 'exchange margin'" on foreign exchange within the euro zone in the two-year period between fixing of rates in 1999 and the introduction of the euro bank notes next year.
By this summer, the Irish banks under investigation and others around Europe agreed to reduce or eliminate these charges for their customers. "This reduction of charges and the deviation of the banks from their collusive behaviour not only produced immediate benefits for consumers but will also contribute to a smooth changeover to the euro," said Mr Monti.
The Commission continued its investigation after five German banks declined to reduce their charges. The €100.8 million fine imposed yesterday is the eighth-largest cartel fine ever imposed by the Commission.
A spokesperson for Hypovereinsbank said yesterday the charges were "groundless", while Commerzbank said in a statement that the fine was "not justified" and maintained that it fixed its bank charges "independently based on market forces and economic decisions".
Despite the fixed exchange rates of euro-zone currencies, the bank said the judgment ignored the fact that "transport, insurance, handling and storage charges" on the euro-zone currencies remained the same.
