Until now, the regulatory woes of big banks' credit default swaps operations were mainly about sales and marketing practices and limited to the United States, where the SEC waged a pitched battle against Goldman Sachs, where U.S. congressmen inveighed against and exposed dubious practices, and where a settlement involving the top banks is likely in the works.

But in a move that caught many by surprise, the European Commission announced it has opened two antitrust investigations concerning the CDS market.

In the first case, the EU will examine whether 16 investment banks and Markit, the leading provider of financial information in the CDS market, have colluded and thus abused their dominant position in order to control the market.

In the second case, the EU will probe nine banks and ICE Clear Europe. The issue is whether "preferential tariffs granted by ICE to the nine banks have the effect of locking them in the ICE system to the detriment of competitors."

The 16 banks to be probed: JPMorgan Chase, Bank of America, Merrill Lynch, Barclays, BNP Paribas, Citigroup, Commerzbank, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, Royal Bank of Scotland, UBS , Wells Fargo Bank/Wachovia, Crédit Agricole and Société Générale. 

For more:
- here's the release

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