Banks' cartel capers caught out
The 2008 financial crisis has clearly done little to curb banks’ nefarious behaviour. The European Commission has just fined five leading institutions more than €1bn for operating currency cartels, with Barclays, Citigroup, JPMorgan, Japan's MUFG Bank and Royal Bank of Scotland those penalised.
The EU competition authorities uncovered two separate cartels, one of which started in 2007 and ran until 2012, the other which kicked off in 2009 and finished in 2013.
Barclays, Citigroup and JPMorgan and Royal Bank of Scotland, were fined €811m for trading within the so-called Forex –Three Way Banana Split cartel, while Barclays, MUFG Bank and RBS were fined €257m over the Forex-Essex Express cartel (many UK traders live in Essex)
The banks’ traders used chatrooms to exchange sensitive information, enabling them "to make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when,” says Brussels.
Competition commissioner Margrethe Vestager says the Commission “will not tolerate collusive behaviour in any sector of the financial markets”.
In fact, Brussels is conducting further investigations into the spot trading market.