Major Banks To Pay Over £100 Million In Fines For Collusion In Gilt Trading

Four major international banks have agreed to pay more than £100 million ($127 million) to resolve antitrust charges over their traders’ unlawful sharing of sensitive information in online chatrooms about buying and selling UK government bonds, known as gilts.

Citigroup Inc., HSBC Holdings Plc, Morgan Stanley, and the Royal Bank of Canada have been implicated in the case, which centers on the period between 2009 and 2013. During this time, traders from these banks exchanged confidential pricing and trading details in private chatrooms. The Competition and Markets Authority (CMA) announced the settlement on Friday. Deutsche Bank AG was not fined, as it was the first institution to self-report its involvement in the collusion.

Juliette Enser, Executive Director of Competition Enforcement at the CMA, noted that the penalties would have been far steeper had the banks not taken substantial steps to prevent similar conduct in the future.

The case focuses on a small group of traders involved in the buying and selling of gilts and gilt asset swaps, with the illicit discussions primarily revolving around pricing and trading strategies. The CMA stated that these conversations were largely held on a one-to-one basis.

The collusion also extended to discussions related to Bank of England buy-back auctions in 2009, part of the central bank’s efforts to stimulate the economy following the global financial crisis and its subsequent quantitative easing program.

This case is the latest in a series of antitrust investigations across Europe into potential collusion in bond markets, with regulators scrutinizing some of the largest banks in the region.