Five world’s ‘largest banks’ fined $5.7bn over currency market fix

Five world’s ‘largest banks’ fined $5.7bn over currency market fix

Five world’s ‘largest banks’ fined $5.7bn over currency market fix

Written by Staff Writer

21 May, 2015 | 6:39 am

Five of the world’s largest banks are to pay fines totaling $5.7bn for charges including manipulating the foreign exchange market.

A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities.

Four of the banks – JPMorgan, Barclays, Citigroup and RBS – have agreed to plead guilty to US criminal charges.

The fifth, UBS, will plead guilty to rigging benchmark interest rates. UBS was the first to settle.

Taking a 545 million-dollar hit, which also covers a penalty for the Libor scandal.

Barclays was fined the most, $2.4bn, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators.

Barclays is also sacking eight employees involved in the scheme.

US Attorney General Loretta Lynch said that “almost every day” for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates.

She added Their actions harmed “countless consumers, investors and institutions around the world”.

Separately, the Federal Reserve fined a sixth bank, Bank of America, $205m over foreign exchange-rigging. All the other banks were fined by both the Department of Justice and the Federal Reserve.

In a scheme known as “building ammo”, a single trader would amass a large position in a currency and, just before or during the fix, would exit that position.

Other members of the cartel would be aware of the plan and would be able to profit.

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