Four banks have agreed a settlement with the Competition and Markets Authority (CMA) to pay fines in cases related to UK Government bonds.

Citi, HSBC, Morgan Stanley and Royal Bank of Canada will pay fines totalling £104.5m.

UK Government bonds, or gilts, are a type of bond that help to finance public spending, and investors in gilts lend money to the Government in return for a steady and stable stream of cash interest payments.

Following an investigation by the CMA, the four banks have agreed to pay fines for specific instances in which traders shared “competitively sensitive information” about aspects of the pricing of UK bonds. The sharing of information occurred in one-to-one exchanges between traders about the buying and selling of gilts and gilt asset swaps.

This conduct took place on various dates between 2009 and 2013, with the last exchanges occurring in 2010 for HSBC, 2012 for Morgan Stanley, and 2013 for Citi and Royal Bank of Canada. Since then, the banks have implemented extensive compliance measures to ensure the behaviour does not happen again.

Deutsche Bank was also investigated but made exempt from a financial penalty for reporting its conduct which began in 2009 and ended in 2013.

Executive director of competition enforcement at the CMA, Juliette Enser, said: “Following constructive engagement between the banks and the CMA, we are pleased that we have been able to settle these five cases involving the past sharing of competitively sensitive information about pricing.

“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.”

Citi was fined £17.2m for its misconduct, HSBC was fined £23.4m, Morgan Stanley was fined £29.7m, and Royal Bank of Canada was fined £34.2m.

The CMA said each fine considered the length of time that had passed since the end of the infringements and the extensive compliance measures that the banks have implemented since then – some of which were in place before the start of the CMA’s investigation.

“The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct,” added Enser. “The fines would have been substantially higher had the banks not already taken unusually extensive steps to make sure that this doesn't happen again.”

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