Eight leading Austrian banks were fined €124 million by the European Commission yesterday for fixing charges in what investigators called "the most shocking cartel ever discovered by the Commission".
Mr Mario Monti, the European Competition Commissioner, said the Austrian banks colluded for more than four years to fix interest rates on loans, as well as fees for transactions including money transfers and export financing
"Banks should be in no doubt that they are subject to EU competition rules just like any other sector," said Mr Monti. He was amazed at the "institutionalised set-up and comprehensiveness" of the cartel, known as the "Lombard Club". Once a month, the chief executives of eight leading Austrian banks met, often after calling for interest rate changes by the Austrian State Bank, "for the joint reflection of measures to be taken".
At the meetings, the bank chief executives co-ordinated policy and product launches and shared information about their own plans for interest rate changes. The Commission said most Austrian banks participated in the cartel, but fined only the eight banks that it said played key roles, including Österreichische Volksbanken, Erste and BAWAG.
The banks' chief executives were aware of the illegal nature of their dealings, according to evidence uncovered. One bank official suggested that "no more minutes should be kept of such meetings" while the legal department of another bank recommended the "destruction of all existing records".
But the advice was not followed and investigators swooped on the banks four years ago, confiscating minutes of meetings, telephone records and correspondence.
Combing through the files they uncovered a cartel covering the entire country - as one of the banks fined put it, "down to the smallest village".
Last December, the Commission fined six German banks more than €100 million for conspiring to keep exchange charges on euro-zone currencies artificially high.
An investigation into collusion between Irish banks on exchange charges on euro-zone currencies was abandoned when the banks agreed to make certain changes.
