EU fines major banks EUR344M over forex cartel

BRUSSELS (AFP) – Brussels slapped fines totalling EUR344 million yesterday on Barclays, RBS, HSBC and Credit Suisse after finding the banks had engaged in a forex 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 EUR1 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 European Union (EU) executive, is the 27-nation bloc’s main competition regulator.

European Commission Vice-President Margrethe Vestager. PHOTO: AFP