European Commission fines five banks €1.1bn over forex rigging

Five banks have been fined €1.1bn (£940m) by the European Commission for rigging foreign exchange markets for 11 currencies, it was announced yesterday.

Competition regulators ordered Barclays, the Royal Bank of Scotland (RBS), JP Morgan, Citibank and MUFG Bank to pay the damages, while UBS was excused for revealing the existence of the rigging to the regulator.

In its first decision, related to the dubbed Three-way Banana Split cartel, the commission levied a €811m fine on Barclays, RBS, Citigroup and JP Morgan. In its second decision – the Essex Express cartel – the commission imposed a €257m fine on Barclays, RBS and MUFG Bank.

Citi Bank was fined €310.7m, RBS €249.2m, JP Morgan €228.8m, Barclays €210.3m and MUFG €69.7m. According to the European Commission, the market-rigging took place between 2007 and 2013.

The investigation, which began in September 2013, revealed that individual foreign exchange traders, using online platforms to communicate, exchanged sensitive information and occasionally co-ordinated their trading strategies.

Competition commissioner Margrethe Vestager stated the banks’ behaviour “undermined the integrity of the sector at the expense of the European economy and consumers”.

However, according to the BBC, RBS claimed its €249m share of the fines were covered by existing provisions, while Barclays also had the funds set aside to cover the fine.

Similar fines for manipulating the currency markets were imposed by UK, US and Swiss regulators in 2014.

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