Four banks — including HSBC — have been fined more than £100 million after traders shared sensitive information with each other in the years following the financial crisis.
The Competition and Markets Authority (CMA) said traders at the four banks used one-to-one chat rooms to discuss UK Government gilts they were buying and selling between 2009 and 2013.
The largest fine went to Royal Bank of Canada, which will pay £34.2 million. Citi will pay around £17.2 million, HSBC £23.4 million and Morgan Stanley £29.7 million.
All the banks had their fines reduced because they settled.
Citi got the largest discount after settling before any of the others.
A fifth bank, Deutsche Bank, received immunity for reporting its conduct to authorities.
Gilts are the UK’s name for Government bonds, which work like an IOU note that people can buy from the issuer.
The Government promises to pay the buyer back at some point and pay a set interest rate, allowing it to borrow money for public spending.
The CMA said the traders were trying to restrict or distort competition.
“The financial services sector is an integral part of the UK economy, contributing billions every year, and it’s essential that it functions effectively,” said CMA executive director of competition enforcement Juliette Enser.
“Only through healthy and competitive markets can we ensure businesses and investors have confidence to invest and grow – for the benefit of all in the UK.
“The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct. The fines would have been substantially higher had the banks not already taken unusually extensive steps to make sure that this doesn’t happen again.”
The CMA said the banks have brought in “extensive compliance measures” to guard against future wrongdoing.
Some of this was even done before the probe started in 2018.
The incidents were between 2009 and 2013, when the Bank of England was buying gilts from the market in response to the financial crisis.
Not all the banks were involved during the entire period. HSBC’s last infringement was in 2010 and Morgan Stanley’s in 2012.
Traders at Deutsche and Royal Bank of Canada shared information with each other on the largest number of individual dates – a total of 41 days spread between November 2009 and April 2013.
The combined fines for all the four banks add up to £104,460,000.
