EU investigates 16 banks for market abuse

THE European Union is probing investment banks, including Goldman Sachs and JP Morgan, over possible collusion in credit default swaps, which many politicians blame for exacerbating the eurozone debt crisis.

Friday’s move by the European Commission marks a step up in efforts to tackle financial contracts designed to insure against debt default, but which have been at the heart of a crisis that has engulfed weaker European countries.

It follows frustration among some countries at Europe’s slow pace of reform of finance and the largely uncharted €406 trillion derivatives market, including credit default swaps (CDS), which ballooned before the global financial crisis.