5 banks have been fined €1.07bn (£935m) by the European Fee after merchants clubbed collectively to rig the international change market.
4 banks within the “Banana Split” cartel – Barclays, RBS, Citigroup and JP Morgan – have been fined €811m in all.
One other three banks within the “Essex Express” cartel – Barclays, RBS and MUFG – have been fined €258m.
A sixth financial institution, UBS, was excused monetary penalties for revealing the cartels’ existence.
The European Fee mentioned the market-rigging befell from 2007 to 2013.
The Fee’s investigation, which started in September 2013, revealed that some particular person international change merchants, utilizing on-line chatrooms, exchanged buying and selling plans and infrequently co-ordinated their buying and selling methods.
Competitors Commissioner Margrethe Vestager mentioned the banks’ behaviour “undermined the integrity of the sector at the expense of the European economy and consumers”.
RBS mentioned its €249m share of the fines was “fully covered by existing provisions”. Barclays additionally mentioned it had put aside cash to cowl the advantageous.
Related fines for manipulating the currency markets have been imposed in 2014 by UK, US and Swiss regulators.
Circles of belief
“Most of the traders participating in the chatrooms knew each other on a personal basis,” mentioned the Fee.
“For instance, one chatroom was referred to as Essex Categorical ‘n the Jimmy as a result of all of the merchants however ‘James’ lived in Essex and met on a practice to London.
“Among the merchants created the chatrooms after which invited each other to affix, primarily based on their buying and selling actions and private affinities, creating closed circles of belief.”
Different chatrooms used included Semi Grumpy Outdated Males, Two and a Half Males and Solely Marge.
Info that the merchants exchanged associated to:
- Excellent clients’ orders (names of shoppers, currencies and quantities concerned)
- Costs relevant to particular transactions
- Open danger positions in numerous currencies
- Different particulars of present or deliberate buying and selling.
Their chats “enabled them to make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when”, the Fee mentioned.