RBS (LON:RBS) and Barclays (LON:BARC) were among six of the globe's biggest banks hit with record fines for fixing the foreign exchange market.
The group, which also included Citi, UBS, Deutsche Bank and JP Morgan Chase will shell out a total of US$5.8bn, which in four cases included an admission that the activity of their traders was criminal.
Using code words such as ‘coiled cobra’ alongside hand signals, a “cartel” of traders colluded together and “conspired to gain unlawful profit by manipulating these [euro and dollar] rates” said the US Justice Department.
Barclays will pay US$2.4bn, which included payments to a number of US agencies including US$441 or £284mln to the FCA in the UK.
It will also sack eight employees.
Citigroup landed the largest fine for a US bank, while there were stiff penalties for JPMorgan while Royal Bank of Scotland (LON:RBS) is to stump up a $395mln.
A fifth, Swiss bank UBS, will plead guilty to rigging benchmark interest rates, while the Fed fined Bank of America Corp US$205mln.
RBS and Barclays are among the biggest traders in a market worth US$500bn daily and the Justice Department said the fact six were “market-makers” made the offences that much more serious.
“It is imperative that these banks accept full responsibility for these bad acts and carry through on their commitments to change the culture that allowed this behavior to go on for years without detection,” the US agency said.
“That is why we have insisted on parent-level guilty pleas, record-level criminal penalties, ongoing cooperation with our investigations and a probation period of three year”.
Not including Bank of America, the total fines and penalties paid by the five banks to resolve the currency investigations amount to around US$9bn.
The fines are the latest in a growing list of fines and penalties incurred by Barclays and RBS in recent years.
Only last month, Barclays chief executive Antony Jenkins said that resolving legacy issues was an important part of his plan to rejuvenate Barclays and move it away from the string of scandals that have tarnished the bank’s image.
Shares in the pair rose on the fines, however, as market commentators said the UK banks may have got off lightly.
Augustin Eden at Accendo Markets said: "While the fine puts Barclays in pole position on the FCA’s Benchmark Fines league table, the fact the UK institution had set aside £2.05bn to cover it will make Barclays the bank of choice for the bulls.”
Shres in Barclays (LON:BARC) rose by 3.5% and RBS by 2%.