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Barclays, RBS Hit with €1.1 Billion fine Over Currency Rigging Scandal

Barclays and RBS are among five big banks fined a total of €1.1bn (£930m) by the European Commission for operating cartels that rigged currency markets.

The two banks and Japan’s MUFG received a €258m fine after a probe found that traders had run a cartel named the “Essex Express” after an online chatroom used  to exchange information.

As part of the same investigation, Barclays, RBS, Citigroup and JPMorgan were fined €811m for the separate “Banana Split” cartel.

A sixth bank, UBS, was involved but escaped fines because it revealed the cartels’ existence.

The banks colluded on trading strategies to rig the foreign exchange market for 11 currencies between 2007 and 2013,the commission said. A second infringement ran from December 2009 to July 2012.

The probe revealed that some employees in charge of trading currencies for their banks shared details of customers’ orders, prices and other information.

This “enabled them to make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when”, the commission said.

Most of the traders involved knew each other personally, with one chatroom called “Essex Express ‘n the Jimmy”, because all but one of them, who was named James, lived in Essex and met on a train to London.

Commissioner Margrethe Vestager said: “Companies and people depend on banks to exchange money to carry out transactions in foreign countries.

“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.”

Majority taxpayer-owned RBS said its €249m share of the fines would be paid with money it had already set aside. Barclays said it had also earmarked money to pay its fine.

UBS said: “This is a legacy matter where UBS was the first bank to disclose potential misconduct. We’ve made significant investments to further strengthen our control framework since then and are pleased this matter is resolved.”

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