By  | March 27 2013 12:23 AM

collusion20posterEuropean antitrust authorities are preparing a case against some of the world’s largest banks, alleging collusion in the $27 trillion market for credit derivatives, The Wall Street Journal reports, citing “people familiar with the investigation.”

The European Commission is investigating 16 financial groups on whether they sought to stifle competition from exchanges in the market for credit-default swaps, which pay out when a country or a company defaults on its debts.

Some or all of the banks could face fines if found guilty.

Also under investigation is Markit Group, a credit derivatives data provider that is partly owned by the dealers, and ICE Clear Europe, a unit of IntercontinentalExchange Inc. (NYSE:ICE). Markit and ICE declined to comment.

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