The European Union is finally calling top financial services firms (NYSE:XLF) “Slim Shady”. The 17-nations’ commission started investigating 16 major investment banks for credit-default swaps — Warren Buffet’s infamous “financial weapons of mass destruction.”
The European Commission is trying to assess whether these 16 investment banks were involved in giving inside information to Markit — one of the leading financial information providers. The commission is also investigating whether nine of these financial institutions carried out unfair deals with ICE Clear Europe (NYSE:ICE).
The list of 16 banks under investigation includes Morgan Stanley (NYSE:MS), Goldman Sachs Group, Inc. (NYSE:GS), Citigroup Inc. (NYSE:C), Bank of America Corporation (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Royal Bank of Scotland Group (NYSE:RBS), Deutsche Bank AG (NYSE:DB), Barclays PLC (NYSE:BCS), BNP Paribas SA (EPA:BNP), Wells Fargo & Company (NYSE:WFC), Credit Agricole SA (EPA:ACA), Societe Generale SA (PINK:SCGLY), HSBC Holdings (NYSE:HBC), UBS AG (NYSE: UBS), Commerzbank AG (PINK:CRZBY) and Credit Suisse Group (NYSE:CS).
The European Commission says the investigation is in the interest of creating stability in financial markets. The move is expected to encourage the use of clearing houses and will facilitate more transparent trading systems. All of the major banks under investigation have declined to comment.