Banks given £2 billion fine over manipulation of foreign exchange rates
Five banks have been collectively fined £2bn by UK and US regulators for traders' attempted manipulation of foreign exchange rates.
HSBC, Royal Bank of Scotland, Swiss bank UBS and US banks JP Morgan Chase and Citibank have all been fined by UK's Financial Conduct Authority (FCA) and the US regulator, the Commodity Futures Trading Commission (CFTC). Barclays is still under investigation.
The BBC reports that fines follow a 13-month investigation by regulators into claims that the foreign exchange market - in which banks and other financial firms buy and sell currencies between one another - was being rigged.
It said traders had attempted to manipulate the relevant currency rate in the market, for example to ensure that the rate at which the bank had agreed to sell a particular currency to its clients was higher than the average rate it had bought the currency. "If successful, the bank would profit," the FCA added.
The CFTC said traders had used private online chat rooms to communicate. They had disclosed confidential customer order information and trading positions, and altered their positions accordingly to "benefit the interests of the collective group".
The FCA said the "tight knit groups" formed by traders at the different banks had described themselves as "the 3 musketeers", "the A-team" and "1 team, 1 dream".
Both regulators found the attempted manipulation of the foreign exchange market had been going on for several years, with the FCA saying the failings occurred between 1 January 2008 and 15 October 2013.
The CFTC said its investigation found the traders' misconduct took place between 2009 and 2012.
Several senior traders at the banks have already been put on leave and the Serious Fraud Office is in the process of preparing potential criminal charges against those alleged to have masterminded the scheme.
The massive market, in which $5.3 trillion worth of currencies are traded daily, dwarfs the stock and bond markets.
"At the heart of today's action is our finding that the failings at these banks undermine confidence in the UK financial system and put its integrity at risk," the FCA said.
See our guide to choosing an ethical bank >
This story has been added to our corporate database. The database powers all our live product guides, giving the score for each company on our rankings tables. Find out more about how we rate companies.
Ethical Consumer on Google+