The Commission fined the banks for taking part in two cartels dubbed ‘Three Way Banana Split’ and ‘Essex Express’ in the Spot Foreign Exchange market. The investigation found some traders in charge of foreign exchange spot trading for the relevant banks exchanged sensitive information and trading plans. The findings went on to show how most of the traders appeared to know each other and coordinated their trading strategies through online chatrooms. One chatroom was called ‘Essex Express ‘n the Jimmy’ because all the traders but “James” lived in Essex and met on a train to London.
The exchanges enabled traders to decide whether to sell or buy the currencies they had in their portfolios and when, the report found.
The sensitive information exchanged in these chatrooms related to outstanding customers’ orders, prices applicable to specific transactions, open risk positions and other details of current or planned trading activities.
Detailing the findings today, the Commission imposed a fine of £708,956,347 (€811,197,000) on Barclays, RBS, Citigroup and JPMorgan.
A second set of penalties saw a fine of £225,204,592 (€257,682,000) slapped on Barclays, RBS and MUFG Bank.
The cartels were exposed by a sixth bank, UBS, which was named in the investigation but avoided a fine after blowing the whistle.
The penalties related to trading in 11 currencies from 2007 to 2013.
Commissioner Margrethe Vestager, in charge of competition policy said: “Companies and people depend on banks to exchange money to carry out transactions in foreign countries.
“Foreign exchange spot trading activities are one of the largest markets in the world, worth billions of euros every day.
“Today we have fined Barclays, The Royal Bank of Scotland, Citigroup, JPMorgan and MUFG Bank and these cartel decisions send a clear message that the Commission will not tolerate collusive behaviour in any sector of the financial markets.
“The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers.”
The 11 currencies involved include the euro, British pound, Japanese Yen, Swiss Franc, US, Canadian, New Zealand and Australian Dollars, and Danish, Swedish and Norwegian crowns.
Barclays is headquartered in London while JPMorgan and Citibank have bases in Canary Wharf.