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EU-ECONOMY-BANKING-FINE
EU fines five major banks 1 bn euros for currency collusion
BRUSSELS, May 17, 2019 (BSS/AFP) – The EU’s powerful anti-trust authority
on Thursday fined five major banks — including Barclays and Citigroup —
more than a billion euros for collusion in the massive foreign exchange
currency market.
The European Commission sanctioned Barclays, the Royal Bank of Scotland,
Citigroup, JPMorgan and Japan’s MUFG Bank a total of 1.07 billion euros ($1.2
billion) after finding that traders colluded to fix exchange rates using
electronic chat rooms, a statement said.
The commission said Swiss giant UBS received no fine as it revealed the
collusion to the authorities.
“These cartel decisions send a clear message that the commission will not
tolerate collusive behaviour in any sector of the financial markets,” said EU
Competition Commissioner Margrethe Vestager.
“The behaviour of these banks undermined the integrity of the sector at
the expense of the European economy and consumers,” she added.
The decision involves two cases of forex manipulation, with the first
known as “Essex Express ‘n the Jimmy” because all the traders (except Jimmy)
lived in the county to the east of London, the commission said.
The other one was called “Three-way banana split”, though the EU’s
executive arm did not explain why.
“Some of the traders created the chat rooms and then invited one another
to join, based on their trading activities and personal affinities, creating
closed circles of trust,” the commission explained.
The collusion took place between 2007 and 2013, roughly the years of the
financial crisis and has been sanctioned by other authorities, including the
US.
Except Japan’s MUFG, the banks cooperated with the commission and in
return received lighter fines than the EU’s maximum amount.
“We are pleased to resolve this historical matter, which relates to the
conduct of one former employee. We have since made significant control
improvements,” said a spokesperson for JPMorgan.
Several of the banks, including Barclays, had already provisioned for the
fines in earlier filings.
BSS/AFP/HR/1020