Brian Hayes MEP has this week submitted a formal complaint to the European Commission’s DG Competition in order to initiate an investigation into the potential cartel activities of Irish banks.
“The tracker mortgage scandal has rocked Ireland and it is important that we have all competent authorities, in Europe and in Ireland, investigating the shocking actions of banks.
“DG Competition, under the control of Commissioner Margrethe Vestager, has the power to investigate any breaches of EU competition law, including cartel activity.
“While we still don’t have all the facts in the tracker mortgage scandal, the clear indications are that there was collaboration between the banks in order to intentionally deny customers their correct tracker mortgage rate. If this proves to be the case, this would be, in very simple terms, a cartel.
“Given the work of the Central Bank and the work of legal professionals such as Padraic Kissane, the Commission have a raft of information which give them grounds for an investigation.
“Through its competition powers, the Commission can, in the course of an investigation, conduct dawn raids on premises, examine all records of a business, seal the premises and records during an inspection and question members of staff.
“There is precedent for Commission action in cases such as these. In June 2002, the Commission fined eight Austrian banks in the “Lombard Club” cartel case. The Commission concluded that Austrian banks developed a highly institutionalised price-fixing scheme with a view to fixing deposit, lending and other rates to the detriment of businesses and consumers in Austria. In December 2016, the Commission issued fines for Crédit Agricole, HSBC and JPMorgan Chase for their part in fixing euro interest rate derivatives.
“While the Central Bank has its powers to examine the banks, it can only investigate from a regulatory and consumer protection perspective. It cannot investigate the tracker mortgage scandal from a competition perspective.
“If Irish banks intentionally collaborated to ensure that customers did not get the correct interest rates on their mortgage product, this is effectively an example of controlling rates in an effort to restrict competition in the mortgage market and to share that market.
“Any EU citizen can make a complaint to DG Competition if they suspect infringements of competition rules. I would hope that if there are whistle-blowers, they could come forward and possibly share their information with DG Competition.”