Blitz Bureau
FOUR major banks, including HSBC and Citi, were fined more than £100m by UK competition regulator after it found traders had been using Bloomberg chatrooms to share sensitive information about government bonds, The Guardian reported.
The penalties follow an investigation by the Competition and Markets Authority (CMA) that discovered that individual traders at Citi, HSBC, Morgan Stanley, Royal Bank of Canada (RBC) and Deutsche Bank had messaged rival bankers about the buying and selling of UK government bonds – known as gilts – on specific dates between 2009 and 2013.
The CMA said the banks had put in place “extensive compliance measures” to avoid similar behaviour by its staff, but it announced a series of fines on February 21. RBC received the largest fine (£34.2m), followed by Morgan Stanley (£29.7m), HSBC (£23.4m) and Citi (£17.2m). Deutsche Bank was exempt from fines after alerting the CMA to wrongdoing. Citi’s penalty was reduced by more than 50 per cent after it agreed to a settlement during the investigation. The banks have been asked to pay by April 22.
The paper quoted Juliette Enser, the CMA’s interim executive director of competition enforcement as saying, “The financial services sector is an integral part of the UK economy, contributing billions every year, and it’s essential that it functions effectively” “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.”
