The Competition and Markets Authority (CMA) has provisionally ruled that five major banks have broken the law as they shared sensitive information of government bond trading in chatrooms online.
Between 2009 and 2013 it has been alleged that Citi, Deutsche Bank, HSBC, Morgan Stanley and the Royal Bank of Canada (RBC) participated in conversations with a small amount of traders.
According to the CMA Deutsche Bank and Citi have admitted to having taken part in the alleged conversations.
Michael Grenfell, executive director of enforcement at the CMA, said, “Our provisional decision has found that, in the aftermath of the global financial crisis, five global banks broke competition law by taking part in a series of one-to-one online exchanges of competitively sensitive information on pricing and other aspects of their trading strategies on UK bonds.
“This could have denied taxpayers, pension savers and financial institutions the benefits of full competition for these products, including the minimisation of borrowing costs.
“A properly functioning, competitive bond market benefits tens of millions of taxpayers and pension savers as well as being at the heart of the UK’s reputation as a global financial hub.
“These alleged activities are therefore very serious and warrant the detailed investigation we have undertaken.”
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