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

LONDON

Five major banks have potentially violated competition laws by engaging in the unlawful exchange of sensitive information regarding British government bond trading through online chatrooms, a UK watchdog said Wednesday based on its preliminary findings.

The Competition and Markets Authority (CMA) said the alleged behavior occurred at various times between 2009 and 2013 by Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada.

The banks are accused of sharing competitively sensitive details, including pricing information and trading strategies, through chatrooms on Bloomberg terminals.

The CMA said the improper information exchange could have hindered the fair competition for products, depriving taxpayers, savers and other financial institutions of rightful benefits.

“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,” said Michael Grenfell, Executive Director of Enforcement at the CMA.

“These alleged activities are therefore very serious and warrant the detailed investigation we have undertaken. While both Deutsche Bank and Citi have admitted their involvement in anti-competitive conduct, we will now consider further representations from the parties before reaching a final decision,” it noted.

The CMA said HSBC, Morgan Stanley and Royal Bank of Canada have not admitted any wrongdoing.

• Competition watchdog
• Deutsche Bank
• HSBC
• Morgan Stanley
• Royal Bank of Canada