EU fines banking giants €344 million for foreign exchange cartel

Traders exchanged sensitive information through online chat rooms

The City of London financial district. EPA

HSBC, Credit Suisse, NatWest and Barclays have been fined a combined €344 million ($389m) by the European Union after their traders rigged the foreign exchange market.

The European Commission hit HSBC with the highest penalty — €174.3 million — while Barclays was fined €54.3 million and NatWest €32.5 million.

Crisis-hit Credit Suisse was also fined, with the second largest penalty of the four, at €83.3 million.

A fifth bank — fellow Swiss lender UBS — was spared a €94 million fine because it blew the whistle on the cartel, according to the European Commission, the EU's executive arm.

The commission said HSBC, Barclays and NatWest — which was called Royal Bank of Scotland at the time of the offences and until a rebrand last year — had their fines cut for co-operating with the investigation.

Several foreign exchange spot traders “exchanged sensitive information and trading plans, and occasionally co-ordinated their trading strategies through an online professional chat room called Sterling Lads”, the commission said in a statement.

This enabled the traders to make informed market decisions on whether and when to sell or buy the currencies they had in their portfolios, rather than acting independently of each other and taking a risk in making these decisions, it said.

Margrethe Vestager, the European Commissioner for Competition, said: “The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers.”

The investigation focused on the trading of G10 currencies — the most liquid and traded currencies worldwide.

The commission said the fines brought to a close its sixth cartel investigation in the financial sector since 2013.

Updated: December 2nd 2021, 2:15 PM