The five banks facing the billion-euro fine had combined 2018-2019 revenues of $241bn [Simon Dawson/Reuters]
Annual revenues for the 12 months ending March 31, 2019:
Morgan Stanley: $39.3bn
MUFG (12 months to June 30, 2018): $52.5bn
Five of the largest banks operating in Europe on Thursday were hit with a 1.07 billion euro ($1.2bn) fine for operating a foreign exchange trading cartel.
Barclays, Royal Bank of Scotland (RBS), Citigroup and JPMorgan were fined 811.2 million euros ($909m) in one settlement, while a second saw a further 257.7 million euro ($289m) fine levied on Barclays, RBS and MUFG Bank (formerly the Bank of Tokyo-Mitsubishi) by European antitrust authorities.
The banks colluded on trading strategies to rig the spot foreign exchange market for 11 currencies, said the European Commission.
“Companies and people depend on banks to exchange money to carry out transactions in foreign countries,” said EU Commissioner Margrethe Vestager, in charge of competition policy.
“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.”
Swiss bank UBS was also involved in the cartel scheme but avoided punishment after it turned whistle-blower on the other banks to the European Commission.
Credit Suisse was charged separately by the EU over foreign exchange collusion last year, and a fine may yet be announced, Bloomberg reported.
While large, the cartel fines are lower than a 1.3 billion euro penalty for banks for rigging Euribor rates and below a record 3.8 billion euro penalty for collusion between truckmakers, according to Bloomberg.
It was individual traders, rather than the banks themselves, who coordinated through online chatrooms. One of the chatrooms was named “Essex Express ‘n the Jimmy” – all the traders except one lived in the British county of Essex and met on the train on the way to the city of London.
They exchanged sensitive information and trading plans in two cartel groups – one running from December 2008 to January 2013, and another from December 2009 to July 2012, the commission said.
RBS, which faces paying 249 million euros ($279m), told the London Stock Exchange it was responding to inquiries from other regulatory bodies regarding “past failings in foreign exchange trading”.
Citigroup will have to pay 310.8 million euros ($348m), while JP Morgan faces a bill for 228.8 million euros ($256m). Barclays will pay 210.3 million euros ($236m) and MUFG must pay nearly 70 million euros ($78m). Their penalties were reduced after agreeing not to challenge the ruling.