The EU Competition Commissioner spoke of a “clear message” for the banks.
(Photo: AP)
London The Swiss bank Credit Suisse and the three major British banks HSBC, Barclays and Natwest have to pay a fine totaling 344 million euros for secret agreements in foreign exchange trading. The EU competition authority announced on Thursday.
Forex traders from the banks had secretly exchanged information in an online chat room called “Sterling Lads” and coordinated their trading strategies on the spot market.
HSBC has to pay the highest fine of EUR 174.3 million, followed by Credit Suisse with EUR 83.3 million, Barclays with EUR 54.3 million and Natwest with EUR 32.5 million. Natwest was still called Royal Bank of Scotland (RBS) at the time of the offense and has been renamed since then.
“The secret collusion of the five banks has undermined the integrity of the financial sector at the expense of the European economy and consumers,” said EU Competition Commissioner Margrethe Vestager. The penalty is a “clear message” that the Commission is committed to clean competition in the financial sector.
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The three British banks admitted their misconduct and received a penalty reduction of ten percent in return. Credit Suisse, on the other hand, preferred to pay the full fine. The bank stated in March that it had not engaged in anti-competitive behavior.
There have been six surveys in the financial sector since 2013
The Swiss bank UBS, which was also involved, escaped a fine of 94 million euros for informing the EU Commission about the cartel. A UBS spokesman said they were happy to have disposed of the contaminated site.
According to the EU Commission, it was the sixth investigation by a cartel in the financial sector since 2013. The last two dealer rings were punished in May 2019. At that time, in addition to UBS, Barclays and RBS, the US banks Citigroup and JP-Morgan as well as the Japanese MUFG were involved.
Their forex traders had coordinated themselves in several chat rooms with names like “Three Way Banana Split” and “Semi Grumpy Old Men”. At the time, the EU Commission imposed fines totaling 1.07 billion euros.
The new punishment seems rather small in comparison. Since the financial crisis in 2007, secret dealer agreements had become known again and again. Supervisors in the US, UK and the EU have fined billions of euros.
Several traders also had to go to jail for attempting to manipulate the Libor and Euribor reference rates. Recently, banks have been targeted for money laundering allegations, such as Deutsche Bank and Credit Suisse.
More: Public prosecutor questions Credit Suisse managers about money laundering allegations.