Proactive Investors - The Competition and Markets Authority (CMA) has provisionally ruled that Citigroup Inc (NYSE:C), Deutsche Bank AG (ETR:DBKGn), HSBC Holdings PLC (LON:HSBA), Morgan Stanley (NYSE:MS), and the Royal Bank of Canada breached competition law by sharing sensitive trading information on the UK government debt market.
Discussions, which are alleged to have taken place in Bloomberg private chat rooms between 2009-13, revolved around the purchase and sale of government bonds, specifically gilts and gilt asset swaps, and allegedly included strategy details such as pricing.
The CMA's 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."
Deutsche alerted the CMA to the issue, while Citi has asked for leniency.
The watchdog's probe is ongoing, though it has warned it could issue fines if its initial conclusions are upheld.