CMA exposes potential anti-competitive activity in UK’s bond market by top-tier banks


The Competition and Markets Authority (CMA) has issued provisional findings indicating potential collusion among five significant banks on the trading of UK government bonds. 

The allegations – including Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada – involve the exchange of competitively sensitive information, including pricing and trading strategies, via one-to-one conversations in Bloomberg chatrooms from 2009 to 2013.

This alleged activity concerns the trading of gilts and gilt asset swaps in various contexts, such as the sale of gilts by the UK Debt Management Office on behalf of HM Treasury and the subsequent trading of these bonds. The exchanges could have inhibited full competition and disadvantaged trading partners, including pension funds, the UK Debt Management Office, HM Treasury and UK taxpayers.

Deutsche Bank and Citi have confessed their involvement under the CMA’s leniency policy, with Deutsche Bank escaping fines if it continues to comply, while Citi’s fines may be discounted.

Citi has also entered into a settlement agreement with the CMA, which may further reduce any imposed fines, provided it adheres to the settlement terms. The CMA’s investigation continues, and any banks found guilty of anti-competitive behaviour may face fines and a published infringement decision.

CMA executive director of enforcement Michael Grenfell said, “Our provisional decision has found that, in the aftermath of the global financial crisis, five global banks broke competition law by taking part in a series of one-to-one online exchanges of competitively sensitive information on pricing and other aspects of their trading strategies on UK bonds.

“This could have denied taxpayers, pension savers and financial institutions the benefits of full competition for these products, including the minimisation of borrowing costs.”

Earlier this year, the CMA published new guidance on how competition law applies to environmental sustainability agreement between firms.

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