The European Commission said yesterday a cartel investigation into whether banks were colluding to fix charges for currency exchanges could be extended to all 11 eurozone states, after its inspectors raided banks in three more EU states, including Ireland.
Antitrust officials raided AIB and Bank of Ireland, as well as ABN-Amro in the Netherlands, Belgium's BBL and KBC and a currency exchange office operated by GWK, a subsidiary of the Belgo-Dutch Fortis group.
The raids followed similar surprise visits in February on eight banks in the four largest euro-zone states. Targets then were Germany's Deutsche Bank and Dresdner Bank, Societe Generale and Credit Agricole of France, BancaCommerciale Italiana and Cariplo in Italy, and Spain's BBV and Argentaria.
The broadening of the focus of one of the biggest cartel inquiries of recent years reflects deep concern in the EU executive that high charges for exchanging euro-zone currencies could undermine the popularity of the single currency.
One of the euro's biggest selling points to consumers was that it was supposed to reduce costs for travellers and companies doing cross-border business.
Officials said they had received complaints from both consumers and politicians that exchange costs were unjustifiably high.
They added they "did not exclude action" in the remaining four euro-zone countries - Portugal, Finland, Austria and Luxembourg - although further raids were unlikely. "The surprise effect is essential," said one official.
He added that the Commission had sent out more than 250 letters demanding information as part of the inquiry. There had been no evidence of charges coming down since the first raids in February, although banks had denied any wrongdoing and, therefore, any need to revise fees. The Commission stressed yesterday that it had not yet established evidence of a cartel. But it said it had concerns that there were agreements between banks on fees for currency exchanges and money transfers.
Minimum fines under EU law for companies found guilty of operating a cartel are €20 million (£15.75 million).
Banks targeted in both rounds of raids have said they would co-operate fully with the inquiry, and were confident of its outcome.
AIB and Bank of Ireland both strongly defended their record and said all charges were cleared with the director of consumer affairs.
The banks added that, although exchange rate risks have disappeared since bilateral rates between the 11 euro-zone states were fixed at the start of the year, they still faced considerable costs. These include transport, distribution, storage and the cost of holding cash that bears no interest.
