.With collusion between traders, clients may not have gotten the best rates (AFP Photo/Daniel LEAL-OLIVAS) |
Brussels
(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.
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