Fines from colluding on eurozone bonds hit UBS and Nomura hardest
UBS was fined €172m and Nomura will have to pay €129.6m for a traders’ cartel that swapped commercially sensitive data from 2007 to 2011
Brussels — UBS, Nomura and UniCredit were fined a total of €371m by the EU for colluding on euro government bond trading during the region’s sovereign debt crisis.
UBS was fined €172m and Nomura will have to pay €129.6m for a traders’ cartel that swapped commercially sensitive information from 2007 to 2011 when eurozone bond yields soared. UniCredit was fined €69m.
It was “unacceptable, that in the middle of the financial crisis, when many financial institutions had to be rescued by public funding these investment banks colluded in this market at the expense of EU member states,” Margrethe Vestager, the EU’s antitrust chief, said in an e-mailed statement.
The EU has spent more than a decade probing how bank traders swapped information in chat rooms, leading to billions of euros in fines. At the same time it approved billions of euros in government support to keep many European lenders alive during the financial crisis.
Vestager’s criticism seems to be aimed at two banks that weren’t fined. A Royal Bank of Scotland unit escaped a fine because it was the first to tell regulators. It received a UK bailout in 2008. Portigon, the successor bank to bailed-out and failed German lender WestLB, avoided a levy because it had no revenue last year.
Bank of America and Natixis participated in the cartel but weren’t fined because they had quit the cartel five years before the EU started its probe. While the euro-bond fines are far lower than previous EU cartels, they do allow the banks’ customers sue for damages if they can prove higher costs were passed on to them.
UBS said the fine could hurt second-quarter results by as much as $100m. It’s considering an appeal and has “taken appropriate action years ago to mitigate and improve processes”, it said in a statement.
Nomura said the fine “relates to historic behaviour” by two former employees “for an approximate 10-month period in 2011.” The bank “will consider all options, including an appeal” and “has introduced increased measures to ensure that we conduct our business with the highest levels of integrity,” it said in an e-mailed statement
UniCredit “vigorously contests” the fine and will appeal to the EU courts, it said in a statement. The bank “maintains that the findings do not demonstrate any wrongdoing.” Nomura didn’t immediately respond to a request for comment.
The EU said traders on European government bond desks were in regular contact, mainly on Bloomberg terminal chat rooms, where they “informed and updated each other on their prices and volumes offered in the run-up” to eurozone government bond auctions “and the prices shown to their customers or to the market in general.”
Citigroup, RBS and JPMorgan Chase were among five banks that agreed in 2019 to pay EU fines of over €1bn for colluding on foreign-exchange trading strategies. The EU is still investigating some banks for a related cartel.
Bank of America, Credit Suisse and Credit Agricole were fined about €28.5m in April over chat rooms where traders swapped information on trading of US supra-sovereign, sovereign and agency bonds.
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