Spanish High Court supports complainant allegations in financial derivatives cartel

The Spanish High Court (Audiencia Nacional) has supported the complainant cartel allegations in the Spanish financial derivatives cartel, but has overturned the fine imposed on four banks arguing that the Spanish Competition Authority CNMC did not provide sufficient evidence proving the existence of an infringement in other derivative contracts.


VAPAT, a renewables infrastructure company, submitted a complaint for alleged concerted practices in the price setting process of financial derivatives linked to syndicated loans related to Project Finance. The CNMC extended the investigation to all derivatives linked to syndicated loans between 2006 and 2016. In February 2018, the CNMC fined four banks for concerting the price of financial derivatives (case S/DC/0579/16 DERIVADOS FINANCIEROS). According to the decision, the four banks concerted the price of financial derivatives used as hedging instruments for interest rate risks in syndicated loans linked to project financing.


For the Court, there is no doubt about the illicit nature of the practices of the banks in the operations carried out with VAPAT. For the rest of derivative contracts between 2006 and 2016, the Court establishes that the CNMC decision showed that banks had concerted “the same interest rate (…) on all financial derivatives”, but the Court points out that the decision failed to show that “(i) such an interest rate was higher than the market rate; (ii) whether or not the parties had agreed to set an interest rate above the market rates; and (iii) whether or not the conditions of the derivatives were set with the knowledge and agreement of the clients”. Thus, the High Court annuls the €90 million fine imposed on the banks.


GAMES Economics experts advised VAPAT in the proceeding before the CNMC. In particular, our contribution was key to identify the collusion patterns and provide evidence on the existence of concerted practices in the price setting process for the four financial derivative contracts between VAPAT and the four banks.


The Decision can be appealled before the Supreme Court (Tribunal Supremo).


The GAMES Economics team advising VAPAT was led by Juan Delgado and Héctor Otero.




  • Interest rate derivative: An interest rate derivative is a financial contract whose value is based on some underlying interest rate or interest-bearing asset. These may include interest rate futures, options, swaps, swaptions, and FRA’s. Entities with interest rate risk can use these derivatives to hedge or minimize potential losses that may accompany a change in interest rates.


  • Syndicated loan: A sydicated loan is a loan offered by a group of lenders (called a syndicate) who work together to provide funds for a single borrower.


  • Project Finance: Project finance is the funding of long-term infrastructure, industrial projects, and public services using a non-recourse or limited recourse financial structure. The debt and equity used to finance the project are paid back from the cash flow generated by the project.


  • Cartel: A cartel is an anti-competitive agreement or concerted practice between two or more rival firms aimed at coordinating their competitive behaviour on the market or influencing other parameters of competition through practices that include but are not limited to the fixing of prices or other trading conditions.
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