Five banks breached competition law over UK government bonds, watchdog says

The world’s five biggest banks breached UK competition law by sharing sensitive information while trading British government bonds in the five years since the global financial crisis, according to the country’s competition regulator.

According to an interim finding published by the Competition and Markets Authority, some traders at Citigroup, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada illegally shared confidential information, including prices and strategies, in chat rooms on Bloomberg terminals. . Wednesday.

As a result, the regulator said, the banks “could have denied the full benefits of competition” to those they trade with, including pension funds and the UK Debt Office.

The alleged sharing of sensitive information took place between 2009 and 2013, the CMA said, adding that the traders exchanged information in connection with DMO’s government bond sales and repurchases by the Bank of England.

“Our interim decision found that five global banks breached competition law in the wake of the global financial crisis,” said Michael Grenfell, CMA’s director of enforcement.

“A well-functioning, competitive bond market benefits tens of millions of taxpayers and pension savers and is at the heart of the UK’s reputation as a global financial centre. These alleged activities are therefore very serious and warrant a detailed investigation that we have begun,” he added.

According to the regulator, if it were to conclude that at least two banks are engaging in anti-competitive behavior, it could impose fines.

The competition watchdog said Deutsche Bank had drawn attention to the conduct, and Germany’s biggest bank admitted it had engaged in “anti-competitive” activity. Deutsche will therefore not be subject to fines if the CMA imposes them.

Citigroup also admitted its involvement and entered into a settlement agreement with the CMA. The Wall Street bank will receive a reduced fine if penalties are imposed, the regulator said.

HSBC, Morgan Stanley and Royal Bank of Canada have not admitted any wrongdoing, the CMA said, adding that the investigation is still ongoing.