Thursday 16 May 2019 11:45 am

Barclays and the Royal Bank of Scotland among five banks hit with €1bn fine for forex rigging

The EU Commission has fined five banks €1.07bn (£940m) for rigging foreign exchange markets for 11 currencies, it announced today.

Competition regulators fined Barclays, The Royal Bank of Scotland (RBS), Citigroup, JP Morgan and MUFG Bank, while UBS was not fined as it revealed the existence of the rigging to the regulator.

In the first decision – related to the so-called forex three way banana split cartel – the Commission levied a €811m fine on Barclays, RBS, Citigroup and JP Morgan.

The second decision – in the so-called forex- Essex express cartel – the regulator imposed a €257m fine on Barclays, RBS and MUFG Bank.

Citi was fined €310.7m, RBS €249.2m, JP Morgan €228.8m, Barclays €210.3m and MUFG €69.7m.

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The Commission said its investigation revealed some individual traders in charge of forex spot trading exchanged sensitive information and trading plans and also co-ordinated trading strategies through online chatrooms.

Information exchanged in chatrooms included outstanding customer orders, prices and their open risk positions.

The investigation revealed two separate infringements concerning foreign exchange spot trading.

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The three way banana split infringement involved communications in three chat rooms – three way banana split, two and a half men and only Marge – among traders from UBS, Barclays, RBS, Citigroup and JPMorgan between December 2007 and January 2013.

The Essex express infringement encompassed communications in two chatrooms – Essex express ‘n the Jimmy and semi grumpy old men – among traders from UBS, Barclays, RBS and MUFG Bank between December 2009 and July 2012.

The Essex express ‘n the Jimmy chatroom was so-called because all the traders but “James” lived in Essex and met on a train to London.

Commissioner Margrethe Vestager, in charge of competition policy said:“The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers”.

An RBS spokesperson said: “Today’s fine is a further reminder of how badly the bank lost its way in the past and we absolutely condemn the behaviour of those responsible. This kind of behaviour has no place at the bank we are today; our culture and controls have changed fundamentally during the past ten years.”

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In a stock exchange announcement RBS said it was co-operating with investigations "on similar issues relating to past failings" and said future financial penalties remain uncertain but "could be material".

An MUFG spokesperson said: "We are committed to ensuring integrity and compliance with the regulatory authorities in every jurisdiction in which we operate, and have taken a number of measures to prevent this occurring again."

A JP Morgan spokesperson said: "We are pleased to resolve this historical matter, which relates to the conduct of one former employee. We have since made significant control improvements.”

Barclays and Citigroup declined to comment.