BUCHAREST, Oct 31 (Reuters) - Romania's anti-trust watchdog has launched an inquiry into a potential breach of competition rules by several banks, after money market rates surged to multi-year highs earlier this month.
"We target up to 10 banks in the system, the monetary market is being monitored by the central bank but it becomes also a competition issue when banks post similar (high) rate levels," a watchdog official, who declined to be named, told Reuters.
In a statement, the watchdog said the investigation is based on suspicions regarding the potential exchange of information between parties active in the financial services market.
Last week the central bank urged commercial banks to lower the cost of short-term cash and threatened to stop calculating indicative rates if interbank lending rates remain high.
It said the spike in money market rates was "temporary and isolated" and urged banks to "return to normalcy".
The move came after overnight deposit rates hit the highest level since 2002 of around 50 percent as regular tax payments, central bank intervention to prop up the leu and demand from foreign players intensified a crunch stemming from global woes.
Local media reported that the central bank was particularly concerned about the activity of some banks in the system owned by foreign players, but the bank declined to comment.
Many economists warn that Romania is more vulnerable to a financing shock than some of its regional peers at a time of global financial unrest because of its high dependence on foreign money to fund modernisation efforts.
The central bank has been increasingly concerned about high borrowing costs spilling over onto individual customers, after some commercial banks raised their credit rates for consumers by several basis points in recent days.
It said it may stop publishing the interbank ROBOR and ROBID rates, used as a reference in banks' dealings with clients, if rates again exceed its lending lombard rate by 25 percent.
Instead, it would use its own deposit and lending rates, at 6.25 and 14.25 percent, respectively. (Reporting by Radu Marinas; Editing by Rupert Winchester)