Banks may face EU fines over fees

The European Commission is likely to start legal proceedings in March against several banks in at least three EU countries suspected of fixing fees for exchanging euro zone bank notes.

Irish banks AIB and Bank of Ireland are among those investigated and a Commission spokesman refused to rule out yesterday the possibility that they would be included in the action.

The spokesman declined to say which banks would receive the statements of objections which precede the proceedings.

"We will probably send statements of objections to a number of banks next month," the spokesman said. "The investigation covers 11 countries and we cannot rule out any of the banks we have investigated, as there may be a second wave of letters."

Spokesmen for both Irish banks, which were investigated late last year by the Commission, said they would be very surprised if action were taken against them.

The Commission has spent months investigating bank fees for exchanging currencies and carrying out cross-border payments in the 11 EU countries that launched the euro a year ago.

A "statement of objections" is the first legal step setting out the Commission's suspicions, after which the companies would have the chance to respond. The process could lead to fines if the suspicions are proved correct.

Consumers and politicians across the euro zone have complained that fees have increased despite the rates for exchanging euro zone currencies being locked a year ago, eliminating foreign exchange risk.

Commission anti-trust officials raided eight leading banks in Germany, France, Spain and Italy last February. This was followed last October by surprise inspections at Dutch, Belgian and Irish financial institutions.

Under EU rules, the Commission can fine companies found guilty of price-fixing or forming market-sharing cartels a minimum of €20 million (£15.75 million), with an overall cap of 10 per cent of annual turnover.

The banks under investigation are Germany's Deutsche Bank and Dresdner Bank, Societe Generale and Credit Agricole of France, Italian savings bank Cariplo and Banco Commerciale Italiana, as well as Banco Bilbao Vizcaya and Argentaria of Spain. Dutch bank ABM Amro, Belgium's KBC and BBL, Bank of Ireland and AIB are also under scrutiny.

Also raided was a bureau de change on the Belgian-Dutch border operated by GrensWissel Kantoor.

A spokesman for Bank of Ireland said: "We would be very surprised if any such action were taken against this bank. We are quite adamant that no such collusion took place and we have no case to answer."