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Settlement between banks - Com. Commission, fines of more than €40 million

How the big 2019 survey on bank commissions closes: Banks will accept guilty pleas for collusion in one class of transactions and pay fines. No other violations were found.

A mutually acceptable settlement between commercial banks, the Hellenic Banking Association (Hellenic Union of Banks) and the Competition Commission (CC) concludes the long-running case of the spectacular raid by the Competition Commission's investigators on the banks' headquarters as well as on the CC's headquarters.

According to BD, the deal will be announced immediately, probably within the week. According to it, the banks will plead guilty to collusion regarding price fixing in specific banking work and will incur fines from the CC estimated at over €40 million for all four banks. The CC will also be fined, with the EA being deemed to have had an active role in the commercial banks' collusion.

For their part, Eurobank, National Bank, Piraeus Bank, Alpha Bank and EETT refuted the allegation of collusion, arguing that the relevant discussions and correspondence concerned an institutional dialogue with a foreign entity (Visa) and were not aimed at a consultation for the definition of commercial policy, arguments that were not accepted by the Competition Commission.

The banks' managements were concerned about the acceptance of the agreement and there were thoughts of letting the process develop, but in the end they accepted the recommendations of the legal services to close the case, as otherwise it would have been dragging on for a long time with an uncertain final outcome.

In reaching a settlement, the role of the chairman of the CC, Ioannis Lianos, who wanted this major case to be concluded in his term of office, was crucial. It is noted that the government has announced the replacement of Mr Lianos by former judge Mary Sharp. 

However, the settlement shows that the findings of the EU audit fell short of expectations and the expectations that had been raised. Banks were put through the Commission's sieve for more than 40 tasks, managements were isolated for many hours during the November 2019 raid by auditors who gained access to the computers and emails of bank executives, and from the result there do not appear to have been any impressive findings.

According to reports, the only interference by the CC on commissions was on the cost of card withdrawals from ATMs of different banks, a revenue that largely burdened foreign visitors to the country and to a lesser extent the domestic market. There was no other finding on the commercial policy on the commissions part where there was a lot of hype.

Note that 2019 was a completely different environment for banks as they were under intense pressure from both investors and regulators to boost revenues and achieve sustainable profitability.

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