EU Fining Big Banks for Currency Collusion

Banks including JPMorgan Chase & Co. and Citigroup Inc. are set to be fined imminently by the European Union (EU) over collusion on foreign-exchange (FX) trading, according to two people with knowledge of the probe.

The European Commission may announce fines as soon as this week as part of a settlement that sees the lenders get reduced penalties for agreeing not to challenge the findings, the people said on condition of anonymity because the investigation is confidential. EU Competition Commissioner Margrethe Vestager has recently accelerated several probes targeting the financial industry, including one alleging collusion over the trading of government bonds.

Barclays Plc, HSBC Holdings Plc, and UBS Group AG are also among a group of banks that the commission has been investigating for nearly five years, lagging behind the United States, the United Kingdom, and Switzerland, which have already issued about $10 billion in penalties. An American official blasted the companies for a “brazen display of collusion” to game markets in 2015. UBS has said it’s been granted conditional immunity by several authorities it didn’t identify.

Credit Suisse Group AG has refused to join the settlement and received separate EU objections last year. The bank’s stance would allow it to challenge the EU in court.

JPMorgan, Citigroup, and the commission in Brussels declined to comment on the possible fines. The other banks didn’t immediately respond to requests for comment.

EU antitrust regulators have already racked up nearly 2 billion euros (US$2.2 billion) in fines from the other rate-rigging cases. Most banks in those probes chose to seek a settlement under a process that sees them admit liability and shun a court appeal in return for a 10 percent discount in their penalties.

While the EU has refused to identify its targets in the FX case, Barclays and HSBC have previously said their FX trading is being reviewed by the EU, and other banks have said they are cooperating with global regulators on FX probes.

HSBC said in February that the EU has questioned it separately about FX options trading, a probe it said is still in in its early stages.

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