UK Regulator Provisionally Finds 5 Banks Broke Competition Law on Government Bonds

   By Elena Vardon 
 

The U.K.'s Competition and Markets Authority on Wednesday said it has provisionally found that five banks broke competition law by exchanging sensitive information on U.K. government bonds in one-to-one online chats.

The regulator said the conversations in Bloomberg terminal chats and alleged unlawful behavior by banks Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada took place between 2009 and 2013.

It said a small number of traders who worked at the banks exchanged information, including pricing and aspects of their trading strategies, on the buying and selling of U.K. government gilts and gilt asset swaps.

"This could have denied taxpayers, pension savers and financial institutions the benefits of full competition for these products, including the minimization of borrowing costs," Executive Director of Enforcement Michael Grenfell said.

The CMA said Deutsche Bank had admitted its participation under the regulator's leniency policy and will not be fined. It added that Citi also admitted its involvement in anti-competitive activity and that applied for leniency during the CMA's investigation, so any fine it receives will be discounted.

"HSBC, Morgan Stanley and Royal Bank of Canada have not admitted any wrongdoing. At this stage, no assumption should be made that any of the banks have broken the law," the CMA said.

Write to Elena Vardon at [e-mail]

(END) Dow Jones Newswires

May 24, 2023 02:58 ET (06:58 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.