European Union fines 4 banks $390 mn in foreign exchange trading cartel

HSBC received the biggest fine of almost $200 million

The European Union said on Thursday that it has fined four major banks a combined USD 390 million for colluding in a foreign exchange spot trading cartel that allowed them to beat inherent risks in currency deals.

HSBC received the biggest fine of almost USD 200 million, while Credit Suisse, RBS and Barclays received smaller penalties. UBS was spared a fine because it revealed the cartel, according to the European Commission, the EU's executive arm.

"The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers, commission Vice President Margrethe Vestager said.

The commission said in a statement that several foreign exchange spot traders "exchanged sensitive information and trading plans, and occasionally coordinated their trading strategies through an online professional chatroom called Sterling Lads."

Because it revealed the cartel, UBS escaped a fine of USD 106 million, while Barclays, RBS and HSBC received reductions for cooperating with the EU probe.