Brokers could go to EU over bank bullying
LAWYERS yesterday advised the City’s independent brokers to turn to EU competition chief Neelie Kroes if calls for the government to prevent bailed-out banks from forcing debt-laden companies to use their investment banking services fall on deaf ears.
The news emerged after the heads of three leading independent stockbrokers – Panmure Gordon chief executive Tim Linacre, Numis chief executive Oliver Hemsley and Evolution chairman Alex Snow – wrote a letter to City minister Lord Myners asking him to act in the interests of competition in the sector.
They argued that recent refinancing deals have been marred by the suggestion that the Royal Bank of Scotland and Lloyds Banking Group have threatened to withhold banking facilities to companies that do not use their own broking arms to complete rights issues on the market.
“It is becoming increasingly apparent that anti-competitive behaviour is arising in UK investment banking,” they wrote. “Independent banks and brokers who have survived the ‘financial tsunami’ without recourse to the taxpayer should not be placed at a competitive disadvantage to those banks who have been bailed out.”
They added: “The government should ensure that state-backed banks can only win investment banking business on their merits rather than on the basis of taxpayer funded balance sheets and ‘corporate bullying’.”
Linacre said yesterday he hopes Myners will “pick up the phone” when he receives the letter.
But if that fails, lawyers have hinted that Kroes – who is nicknamed “Steely Neelie” for her stringent approach to enforcing competition in the sector – would be prepared to act to enforce commission articles 82 and 86 (1), which address “collective dominance by tying in separate markets”.