CDS\'s are a form of insurance policy taken out on financial instruments, such as bonds, in case they lose value. The banks include Barclays, Goldman Sachs, Deutsche Bank and Citigroup. The probe centres on whether preferential treatment - including special low fees - was given by a clearing house to drum up business. The other five banks involved are Bank of America, Credit Suisse, JP Morgan Chase, Morgan Stanley and UBS. The EU\'s anti-trust commissioner, Joaquin Almunia, said in a statement: \"CDS\'s play a useful role for financial markets and for the economy. \"Recent developments have shown, however, that the trading of this asset class suffers a number of inefficiencies that cannot be solved through regulation alone.\" The value of CDS - said to be in the region of $28 trillion (£17tn) dwarfs the worth of the instruments they are based on. As well as providing insurance against a bond going bad, CDS are also used for speculation, with banks and hedge funds trading in CDS to make money without actually owning the underlying bonds. During the height of the financial crisis there were concerns that speculation in CDS for bonds was driving down prices and fuelling market panic. The European Commission said it is investigating whether the nine big investment banks received special treatment from the clearing house ICE Clear Europe, and were therefore only giving their business to ICE. The Commission said: \"The effects of these agreements could be that other clearing houses have difficulties successfully entering the market and that other CDS players have no real choice where to clear their transactions.\" The nine banks are shareholders in ICE\'s US clearing arm. Preferential treatment? In a separate case, the Commission said it was investigating whether those nine banks - and the seven others that act as dealers in the CDS market - give essential information on pricing and other daily activities only to Markit Group Ltd, which is the leading financial data provider for that market. Such preferential treatment \"could be the consequence of collusion between them or an abuse of a possible collective dominance\" and could lock other data providers out of the CDS business, the Commission said. Seven other firms are targeted in this probe: BNP Paribas, Commerzbank, HSBC, Royal Bank of Scotland, Wells Fargo, Credit Agricole and Societe Generale. All 16 banks, which control around 90% of the market whereby banks deal with each other, are shareholders of Markit. Markit holds a near monopoly on financial data, which the EU says could leave smaller competitors with worse information on pricing. Market players, however, insist that there is no conclusive proof of such a link. Markit said Friday it \"does not believe it has engaged in any inappropriate conduct and looks forward to demonstrating that to the Commission\". A spokeswoman for IntercontinentalExchange said the company would cooperate with the investigation.