Forex Rigging Fines Slapped on Several Banks
Barclays has been fined millions of pounds for rigging the forex market, and the Financial Conduct Authority (FCA) may make an official announcement soon. Simultaneously, regulatory bodies in the US are gearing up to slap a series of fines and penalties on its banks and financial institutions for manipulating the forex market.
The banks are expected to make a settlement with the US government, and one of them is the Royal Bank of Scotland, which has already pleaded guilty to manipulating the setting of currency price.
The fine that the FCA has imposed on Barclays will turn out to be a boon to Osborne as he is known for giving away fines to a variety of charities, including those related to the military.
The US Department of Justice (DoJ) may fine a number of US banks such as JP Morgan and Citigroup early this week. Reportedly, UBS has escaped prosecution by agreeing to co-operate with the authorities.
In November, regulators had fined six banks. Since Barclays had withdrawn from a settlement under pressure from the Department of Financial Services, it is now being fined again by the FCA. UK’s prominent banks had been making monetary preparations to pay fines from the past few weeks. RBS, which had paid fines of £400 million in November, has set aside £334 million for fines during Q1. On the other hand, Barclays has set aside £2 billion to spend on settlements related to forex rigging.
Last month, the RBS referred to
advanced settlement discussions regarding the criminal investigation being conducted by the US Department of Justice and with certain other financial regulatory authorities.
The HSBC, which had been part of the settlement in November, did not make similar preparations when it published its financial statement recently.
November’s settlement was the first of its kind for three watchdogs—Commodities Futures and Trading Commission of US, the Finma of Switzerland, and the FCA. The regulatory bodies, who had published a series of emails and instant chats among various forex traders and banks while sharing client-related information, referred to themselves as “The A-Team,” “The Three Musketeers,” “The Players,” “A Co-operative,” and so on.
The Libor scandal threw open the cover on forex rigging, forcing regulators to thoroughly scrutinize various financial markets. They have investigated price setting methods of various commodities, including gold. As a result, in May 2013, a fine of £26 million was imposed on Barclays.