Cape Times

Global banks fined for foreign-exchange collusion


CITIGROUP and Barclays are among global banks fined a total of 90 million Swiss francs (R1.35 billion) by Switzerlan­d’s competitio­n regulator for their roles in colluding on foreign-exchange rates.

Barclays was fined 27 million francs, Citigroup 28.5 million francs and JPMorgan Chase & Co was hit with a 9.5 million-franc penalty, Switzerlan­d’s competitio­n commission said yesterday.

UBS Group AG avoided a fine because it helped reveal the existence of the cartel.

The Swiss sanctions come after years of investigat­ion by regulators on both sides of the Atlantic into how traders used chatrooms to fix leading currency exchange rates.

Five of the banks agreed last month to pay €1.07 billion to resolve an EU probe into forex collusion.

Traders at Barclays, Citigroup, JPMorgan, Royal Bank of Scotland Group Plc and UBS ran online chatrooms to share sensitive informatio­n over six years in a cartel that was known as the “Three-way banana split,” according to Comco.

Traders at Barclays, MUFG Bank, RBS and UBS operated the so-called Essex Express, named for the commuter train they all took, to fix trades in a similar manner between 2009 and 2012, according to the Swiss regulator.

Comco fined RBS 22.5 million francs and MUFG Bank Ltd 1.5 million francs.

An investigat­ion into Credit Suisse Group AG’s role is continuing. Bank Julius Bär & Co AG and Zürcher Kantonalba­nk have been cleared of wrongdoing, according to Olivier Schaller, Comco’s deputy director.

The Swiss sanctions bring a wave of regulatory probes one step closer to conclusion after traders’ manipulati­on of benchmark foreign-exchange rates was exposed in 2013, triggering investigat­ions in the US and the UK.

To date, more than a dozen financial institutio­ns have paid about $11.8 billion in fines and penalties globally, with another $2.3 billion spent to compensate customers and investors.

Switzerlan­d’s Comco avoided the damning language of its counterpar­ts, saying only that the sanctioned banks “have committed not to conclude such agreements in the future.”

EU competitio­n commission­er Margrethe Vestager said last month that its fines “send a clear message that the commission will not tolerate collusive behaviour in any sector of the financial markets.”

Comco’s decision can be appealed to the Switzerlan­d Federal Administra­tive Court, but it wasn’t immediatel­y clear if any of the banks would do so.

Some of the banks had benefited from a leniency programme that led to a reduction of the fine, the regulator said.

MUFG said in an email that the fine relates to “one individual’s conduct” at the bank, and that it had “taken a number of measures to prevent this occurring again.”

Officials at other lenders fined yesterday declined to comment or couldn’t be immediatel­y reached.

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