Forex manipulation

3tn a day forex market, in what they hope will draw a line under one of the biggest cases of misconduct in banking since the global financial crisis. Mark Taylor, Dean of Warwick Business School, who sits on the Academic Advisory Group of the Bank of England’s Fair and Effective Markets Review. The revelation that traders colluded to move around currency exchange rates was particularly embarrassing for the banks because it occurred after forex manipulation had paid billions of dollars to settle claims that their traders had tried to rig interbank lending rates.

It has raised questions as to whether the industry learnt any lessons from the previous scandal. A Chinese investor walks past screens showing stock indexes at a trading house in Shanghai on August 13, 2010. 21 percent amid growing signs that the world’s third-largest economy is slowing, making further tightening policies unlikely, dealers said. 9bn paid by a larger group of institutions to settle the Libor rigging claims. The banks who settled over forex — Barclays, Citigroup, JPMorgan Chase, RBS, Bank of America and UBS — are hoping the deal will allow them finally to draw a line under both affairs. UBS escaped criminal charges on forex because it was the first to co-operate with investigators. But the DoJ found it had violated the terms of its Libor settlement, so the bank will plead guilty to rigging Libor and pay an additional fine over that issue.

8bn by the US Federal Reserve. The activities undermined transparent market-based exchange rates that serve as a critical benchmark to the economy. That partly reflects the fact that the bank is settling with the most agencies — including the DFS, the US Commodity Futures Trading Commission and the UK’s Financial Conduct Authority. 284m, is the largest in the regulator’s history. 115m on Barclays for attempting to manipulate US dollar Isdafix swap rates, marking the first time it has taken action in connection with that benchmark.

DFS was not part of the deal. Both parties agreed to be part of Wednesday’s resolution as long as DFS could exclude a probe into Barclays’ forex electronic trading platform, which will be concluded at a later date. Barclays will also have to fire eight employees, including four who have left the bank in the past month, as part of its deal with the DFS, which has made individual accountability a key factor in its bank settlements. Unlike the DoJ, the DFS does not have to prove a criminal case against individuals. Of the banks that are settling on Wednesday, the DFS only has jurisdiction over Barclays. 60m to resolve violations of its 2012 non-prosecution agreement for Libor — under which the bank agreed to not commit any additional wrongdoing for a certain period of time. DoJ has taken such a step.

342m to the Federal Reserve over forex. The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions. RBS’s deferred prosecution agreement for Libor expired this year so its settlement in that case is not affected. Pleading guilty for such wrongdoing is another stark reminder of how badly this bank lost its way and how important it is for us to regain trust. 342m respectively by the same agencies.

The DoJ, the DFS and other agencies are continuing to investigate other banks, including HSBC and Deutsche Bank, for alleged forex rigging and settlements in those cases could come later this year. Shares rose among the European banks fined, with UBS up 3. 4 per cent, Barclays up 2. 5 per cent and RBS up 1. 6 per cent in afternoon trading in London. The affected US banks fell marginally, with Citi down 0. 42 per cent, JPMorgan down 0.

36 per cent and Bank of America down 0. Copyright The Financial Times Limited 2017. You may share using our article tools. Please don’t cut articles from FT. FT and ‘Financial Times’ are trademarks of The Financial Times Ltd. The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.