Dozens of Swiss banks are facing a preliminary investigation by the nation's competition watchdog on suspicion lenders colluded to limit the pay of junior recruits in one of Europe's biggest financial centers.

"It concerns the market for young talent," Patrik Ducrey, the director of Switzerland's Competition Commission said in a telephone interview on Wednesday. "We have indications employers are talking about salaries, not to fix minimum salaries but to fix maximum salaries."

Ducrey declined to name any of the banks facing the preliminary investigation but said they include both "big banks and private banks" in Switzerland. The 34 banks under investigation are all based in six German-speaking regions of the country, Comco said in a statement earlier this week.

European lenders from Spain to Germany have faced staff cost pressures as higher inflation prompts demands for fatter pay packages. Switzerland's dual-track education system funnels thousands of both university graduates and apprentices into the banking system each year.

In the aftermath of the pandemic, junior Wall St. bankers were able to bid for starting salaries in excess of $100,000 amid a general crunch in available talent. Zurich-based Credit Suisse Group AG and UBS Group AG were among those pushing up wages in an attempt to win recruits.

Spokespeople for Credit Suisse and UBS declined to comment on the probe. The Swiss Bankers Association, which represents some 260 financial institutions, also declined to comment.

For now, Comco is examining whether the "indications that the exchange of information on the salaries of certain categories of employees amounts to illegal agreements within the meaning of antitrust law." It said it could be extended to other companies or regions if necessary.

Hugo Miller reports for Bloomberg News.

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