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EU fines four banks £293m in foreign exchange rigging

·2-min read
The London headquarters of HSBC and Barclays banks, at Canary Wharf in east London. Many banks are moving assets from London to other EU cities in the face of uncertainty over Brexit. Picture date: Monday December 3, 2018. Photo credit should read: Matt Crossick/ EMPICS Entertainment.
HSBC, Barclays and NatWest were among the banks which faced huge fines. Photo: PA Matt Crossick/ EMPICS Entertainment.

The European Union has fined four of the largest banks a combined total of £293m ($390m) for rigging the foreign exchange spot-trading market.

HSBC (HSBC), Barclays (BSC), Natwest (NWG) and Credit-Suisse (CS) were all subject to fines for deliberately influencing and manipulating the market by exchanging sensitive information and trading arrangements.

UBS (UBS) was given immunity from the case because it had revealed the existence of the online trading group responsible for the rigging, known as the "Sterling Lads".

The European Commission gave HSBC was given the largest penalty of the group, ordering to pay £148.3m for its traders' involvement. Barclays was fined £46.2m for it involvement in the scandal and Natwest (or RBS as it was at the time of the offence, 10 years ago) was ordered to pay £27m.

Credit-Suisse was given the second-biggest penalty out of the four with £70.9m.

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The European Commission said in a statement that several foreign exchange spot traders "exchanged sensitive information and trading plans, and occasionally co-ordinated their trading strategies through an online professional chatroom called 'Sterling Lads'."

European Commission Vice-President in charge of Europe Fit for the Digital Age, Margrethe Vestager talks at the start of a meeting of the College of Commissioners at the Berlaymont, in Brussels, Belgium, November 10, 2021. Stephanie Lecocq /Pool via REUTERS?
European Commission Vice-President Margrethe Vestager castigated the five banks for their part in the trading scandal. Photo: Stephanie Lecocq /Pool via REUTERS

Margrethe Vestager, the European Commission vice president, said: "The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers."

The commission said HSBC, Barclays and NatWest - which was known as Royal Bank of Scotland at the time of the offences - saw their fines cut for co-operating with the investigation.

A NatWest spokesperson said of the penalty: "We are pleased to have reached this settlement regarding serious misconduct that took place in a single chatroom, and that involved a former employee of the bank, around a decade ago.

It follows the settlements reached with UK, US and European authorities on similar issues.

Our culture and controls have changed fundamentally during the past 10 years and this kind of behaviour has no place at the bank we are today."

The news comes as The Bank of Ireland was handed a €24.5m (£20.8m) for breaching regulations concerning its IT systems. The five breaches of regulations took place between 2008 and 2019, and efforts to address the failings were completed in 2019

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