The UK's competition authority, CMA, believes in a preliminary investigation that five major banks, Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada, breached the rules by sharing information about the brokerage of British Treasuries. These banks "illegally shared sensitive information" in series of instant messaging conversations, "concerning the purchase and sale of British Treasury bonds, particularly long-term loan bills ("gilts") and swaps relating to such bonds," the CMA wrote in a statement Wednesday. These private conversations took place "at various times between 2009 and 2013," she adds.
«
By illegally exchanging sensitive information rather than fully competing with each other, the banks involved in these arrangements may have deprived those who transact with them, including pension funds, the UK Debt Management Office, and ultimately the Treasury and UK taxpayers, of the benefits of competition." argues the CMA. It was Deutsche Bank that alerted the CMA to its involvement in "alleged illegal" activities. Citi also cooperated fully. This should allow the former to escape punishment and the latter to have its potential fine reduced. "We have fully cooperated with the CMA in this matter and we are pleased to put it behind us," Citi said in a statement sent to AFP. The investigation continues and "if the CMA concludes that at least two banks have engaged in anti-competitive activities", it may decide to impose a fine on them.
Morgan Stanley said in a statement sent to AFP that it had "fully cooperated with the CMA during this investigation ... But we disagree with his preliminary findings and intend to challenge them." Similarly, HSBC "refutes the allegations of the CMA" and will continue to "make (its) arguments heard until the final decision".