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File photo of the European Commission headquarters in Brussels. Shutterstock

EU fines major banks €344 million over foreign exchange trading cartel

Barclays, Royal Bank of Scotland, HSBC and Credit Suisse all received fines.

THE EUROPEAN COMMISSION has today imposed fines totalling €344 million on Barclays, Royal Bank of Scotland (RBS), HSBC and Credit Suisse after finding they had engaged in a foreign exchange (Forex) spot trading cartel. 

Traders at UBS were also found to have taken part, but the European Commission agreed to reduce the Swiss bank’s fine to zero after it came forward voluntarily to cooperate with regulators.

“The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers,” commission vice-president Margrethe Vestager said.

These fines brought to an end the third part of an investigation that has been ongoing since 2013 and which had already resulted in more than €1 billion in fines in 2019.

The probe revealed that traders in charge of spot foreign exchange transactions on major currencies, acting on behalf of the British and Swiss banks, coordinated their trading strategies.

The commission said the traders at the banks sometimes coordinated through an online chatroom called “Sterling Lads” – named after the British currency.

Sometimes, on this group, traders who were supposed to be rivals would agree to stand down to avoid interfering in each other’s trades, distorting the market.

“Our cartel decisions … send a clear message that the Commission remains committed to ensure a sound and competitive financial sector that is essential for investment and growth,” Vestager said.

The European Commission, the EU executive, is the 27-nation bloc’s main competition regulator.

© AFP 2021

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