By Foo Yun Chee
BRUSSELS (Reuters) - EU regulators are set to suspend indefinitely an antitrust investigation into suspected preferential tariffs on credit default swaps offered by ICE Clear Europe to nine banks due to lack of evidence, a European Commission source said on Wednesday.
The EU watchdog's decision also took into account the entry of European clearing house LCH.Clearnet into the market, the source said.
ICE Clear Europe is a credit default swap clearing house owned by exchange operator InterContinentalExchange Inc.
LCH.Clearnet, which is set to be acquired by the London Stock Exchange, expanded into European credit default swaps in May, which insure the buyer against a borrower's debt default based on leading European indexes.
The Commission opened an investigation into the $28 trillion credit default swaps market in April last year, concerned that ICE Clear Europe's tariff deals may have locked the banks into the ICE system and hurt competitors.
It identified the nine banks as Bank of America, Barclays Bank, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs Group, JPMorgan Chase & Co, Morgan Stanley and UBS.
The Commission will continue a separate investigation into suspected collusion by CDS prices provider Markit and 16 banks, the source said. Companies can be fined up to 10 percent of their global revenues for breaching EU rules.
The lenders involved in the ICE case are among the 16 banks.
Derivatives were at the heart of the collapse of U.S. bank Lehman Brothers four years ago, causing a near meltdown in global markets and prompting a raft of reforms including higher bank capital buffers. (Reporting by Foo Yun Chee; Editing by Gary Hill)
