The United Kingdom’s Competition and Markets Authority (CMA) announced on Friday that it has reached a settlement with four banks over competition law violations in the gilt market.
Gilts are a crucial type of UK government bond that help finance public spending. Investors lend money to the UK government in exchange for stable interest payments.
Following an investigation, the CMA determined that Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, Morgan Stanley, and Royal Bank of Canada (RBC) unlawfully shared sensitive pricing information in private one-on-one Bloomberg chatrooms. This conduct occurred between 2009 and 2013, with the last exchanges taking place in 2010 for HSBC, 2012 for Morgan Stanley, and 2013 for Citi, Deutsche Bank, and RBC. The CMA found that some of the collusion occurred in connection with Bank of England buy-back auctions in 2009 as part of its quantitative easing policy during the financial crisis.
Fines and Settlement Details
The CMA imposed a total fine of over £100 million, with the breakdown as follows:
- Citi: £17.2 million
- HSBC: £23.4 million
- Morgan Stanley: £29.7 million
- RBC: £34.2 million
Deutsche Bank received full immunity as it holds “immunity for reporting its conduct which began in 2009 and ended in 2013.”
According to CMA’s Executive Director of Competition Enforcement Juliette Enser, the fines would have been significantly higher had the banks not taken extensive compliance measures to prevent future misconduct. Since the investigation, all banks involved have strengthened their internal compliance protocols.
Ensuring Market Integrity
The CMA emphasized that healthy competition is essential for investment, innovation, and growth, ensuring competitors determine pricing and strategies independently. Enser underscored the importance of maintaining competitive financial markets, stating:
“The financial services sector is an integral part of the UK economy, contributing billions every year, and it’s essential that it functions effectively. Only through healthy and competitive markets can we ensure businesses and investors have confidence to invest and grow – for the benefit of all in the UK.”
The banks have until April 22, 2025, to pay their fines.
