Brussels, 03/05/2001 (Agence Europe) - The European Commission has decided to close infringement proceedings that it had initiated against the German bank Bayerische Landesbank Girozentrale, on one hand, and the Irish bank Ulster Bank Ltd, on the other. Action was initiated after the banks had changed their commission tariffs for exchanging euro-zone bank notes. The European Executive had already renounced similar proceedings against the Dutch bank SNS last month, after the bank had announced that it would give up its fixed charges and do away with all commissions from the month of October for its clients (see EUROPE of 12 April, p;12). We recall that the Commission had opened an inquiry in 1999 on the subject of an agreement concluded between banks of seven EU countries (Portugal, Ireland, Finland, Belgium, Germany, the Netherlands and Austria) in the aim of keeping conversion commissions at certain levels. It had sent a letter of grievances to the incriminated banks for practices considered counter to European competition law. After the SNS, Ulster Bank and Bayerische Landesbank have taken a step in the right direction by announcing their intention to unilaterally modify the structure of their exchange commission, thus abandoning a behaviour that is in contradiction with the rules on understandings. In particular:
Ulster Bank decided to no longer apply the minimum fee of £2 and to reduce its percentage commission of 2.25%, that it is accused of having agreed with other Irish banks. Instead it will apply only a percentage free of 1% on all operations. The abandonment of the minimum charge and the reduction in the percentage commission means that, for all transactions, Ulster Bank's fees will decrease. Furthermore, in anticipation of the arrival of the euro on 1 January 2002, Ulster Bank will offer the service free for its account-holders for amounts up to EUR 1,250 for the last three months of 2001.
The Bayerische Landesbank has also decided to no longer apply the minimum fee of 2 euros and to bring its percentage charge of £2 down from 3.0% to 2.0% for all customers as from 1 May. From the same date, the service will be free for its account-holders insofar as the buying of euro-zone bank notes is concerned. Both buying and selling of bank notes will be free for account-holders from 1 October.
The Commission welcomes the abandonment of such practices which will allow consumers to benefit from competitive tariffs. Commissioner Mario Monti nonetheless specified that the "Commission remains determined to pursue all and every anti-competitive practices including in the financial sector and even after the introduction of the euro". One of Mr Monti's spokespersons pointed out that the Commission had been approached by other banks located in the Netherlands, Germany and Finland, which also envisage reducing if not abolishing their exchange charges altogether. It should be noted that the collusive behaviour of banks under scrutiny will automatically come to an end on 2 January 2002, when consumers in the euro-zone will no longer have to exchange their notes. The Commission, however, may pursue the proceedings until this date and impose fines, if it considers this to be necessary.