EU fines five major banks over $1 billion for currency collusion

European Union regulators have fined five banks a total of more than 1 billion euros ($1.1 billion) for colluding in the trade of large sums of foreign currency.

The European Commission said Thursday that investigators found that some bank employees in charge of spot trading in 11 currencies "exchanged sensitive information and trading plans." They also sometimes coordinated strategies through online professional chat rooms.

The commission, which polices anti-trust issues, fined Barclays, Royal Bank of Scotland, Citigroup and JPMorgan over 811 million euros for collaborating in a foreign exchange spot trading cartel dubbed "Forex - Three Way Banana Split."

It also fined Barclays, RBS and MUFG Bank over 257 million euros for taking part in the "Forex - Essex Express" cartel.

"Foreign exchange spot trading activities are one of the largest markets in the world, worth billions of euros every day," the EU's competition commissioner, Margrethe Vestager, said.

"The behavior of these banks undermined the integrity of the sector at the expense of the European economy and consumers."

The fines would have been 10% higher, but the banks got a reduction for acknowledging that they had taken part. UBS escaped any punishment by revealing the cartels.

The two cartels involved the Spot Foreign Exchange market for the euro, British pound, Japanese yen, Swiss franc, U.S., Canadian, New Zealand and Australian dollars, and Danish, Swedish and Norwegian crowns.

When companies exchange large amounts of currency they often use a forex trader. Spot order transactions are meant to be executed on the same day at that day's exchange rate.

The commission said some bank employees using online chatrooms swapped information about the amounts clients might want to exchange and the currencies and prices involved in a transaction as well as details about current or future trading activities.

This, the commission said, let traders "make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when."