EU slaps $390m in fines on 5 Swiss, British banks for forex trading cartel

The European Commission announced Thursday that it has fined five banks for participating in a foreign exchange spot trading cartel.

After an investigation, the commission slapped fines totaling €344 million (about $390 million) on Swiss banks UBS and Credit Suisse as well as UK lenders RBS, HSBC and Barclays, it said in a statement

The probe revealed that some traders who were acting on behalf of these banks and were in charge of foreign exchange spot trading of G10 currencies, the most liquid and traded currencies globally, “exchanged sensitive information and trading plans and occasionally coordinated their trading strategies through an online professional chatroom called Sterling Lads,” said the statement.

“These information exchanges enabled the traders to make informed market decisions on whether and when to sell or buy the currencies they had in their portfolios, as opposed to a situation where traders acting independently from each other take an inherent risk in taking these decisions,” it added.

Noting that foreign exchange spot trading activities are “one of the largest financial markets in the world,” Commissioner Margrethe Vestager said: “The collusive behavior of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers.”

While UBS received full immunity for revealing the existence of the cartels, Barclays, RBS and HSBC benefited from reductions to their fines thanks to their cooperation with the investigation, but Credit Suisse did not cooperate and did not receive any reductions.

Whereas RBS will pay €32.47 million, Credit Suisse will pay €83.29 million, Barclays will pay €54.35 million, and HSBC will pay €174.28 million. (Anadolu Agency)