Hmmm...let's see where this leads us.
Via the Financial Times today:
The European Commission has opened sweeping antitrust investigations into a collection of the biggest players in the credit default swaps market, including ICE, the industry’s leading clearing house.
The investigations, launched by Joaquín Almunia, the competition commissioner, open a new chapter in the commission’s attempts to regulate a group of exotic securities that played a central role in the financial crisis that brought down leading Wall Street investment banks and required hundreds-of-billions of dollars in taxpayer-funded bail-outs.
And:
The probe consists of two investigations. In the first, the commission is examining whether Markit, a British company that provides financial information about credit default swaps, colluded with 16 investment banks to dominate the market.
The second investigation centres on IntercontinentalExchange’s European clearing business, ICE, and whether special profit-sharing arrangements and other preferential tariffs it has granted to nine of the banks have effectively closed them off from doing business with competing clearing houses.
The banks include some of the world’s largest financial institutions – Bank of America Corporation, Barclays Bank, Citigroup, Crédit Suisse Group, Deutsche Bank, Goldman Sachs Group, JPMorgan Chase, Morgan Stanley and UBS.
US authorities began a similar probe last year.
Mr Almunia said the investigations were intended to improve transparency and fairness in the market. “CDS play a useful role for financial markets and for the economy. Recent developments have shown, however, that the trading of this asset class suffers a number of inefficiencies that cannot be solved through regulation alone,” he said.[emphasis added]
Collusion in a market like this is what leads, among other things, to financial disaster. A small group is in on the game, they fix the rules and they unite together to obscure what they are doing because there is a lot of dough to made.