Global bank regulators unveil plans for forex shake-up following latest rigging scandal
Since forex fixing allegations emerged in January 2013, more than 30 banks are reportedly under investigation by a dozen regulators
Tuesday 15 July 2014
Global bank regulators today announced plans to massively shake-up the way foreign exchange benchmarks are set, following the latest rigging scandal to hit financial markets.
The Financial Stability Board, chaired by Bank of England Governor Mark Carney, found that the two main currency fixes — London’s 4pm and Frankfurt’s 2.30pm — were open to abuse.
It said the concentration of forex trading around the fixes “can create an opportunity and an incentive for dealers to try to influence the exchange rate — allegedly including by collusion or otherwise inappropriate sharing of information — to try to ensure that the market price at the fix generates a rate which ensures a profit from the fix trading”.
Tuesday's report focuses on the need for banks to increase their own controls to ensure they deal forex around the fixes clearly on their clients’ and not their own behalf.
Since forex fixing allegations emerged in January 2013, more than 30 banks are reportedly under investigation by a dozen regulators, and more than 20 individual traders have been suspended.
No fines have yet been imposed on banks for forex rigging, but experts believe that when they do come they could be even bigger than those levied for manipulating the Libor interest rate benchmark.
The Basel-based Financial Stability Board announced 15 draft recommendations for changing how exchange rates should be fixed.
Key proposals include widening the window of the fix from its current 60 seconds; seeking alternative measures such as a volume-weighted value calculated over 24 hours; moving the fix away from the centre point (on the hour or half hour); an independent global facility for matching orders; and more rigorous controls in banks.
Responses to Tuesday's plans must be submitted by 12 August.
- 1 Man on naked bike ride gets ejected after becoming aroused
- 2 Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the ‘demon drink’ - latest news
- 3 Ayyan Ali: Pakistan's top model now appears in the courtroom rather than on the catwalk
- 4 Fifa corruption: Europe plots to stage an 'alternative World Cup' in place of Russia 2018
- 5 Jaden Smith wears gender fluid dress to high school prom with Hunger Games actress
Photographer who performed naked shoot in China's Forbidden City sparks outrage
Ed Miliband returns to the backbenches but it's all a bit awkward as he tries to avoid eye-contact with fellow Labour MPs
Man on naked bike ride gets ejected after becoming aroused
Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the ‘demon drink’ - latest news
Isis tortures 14-year-old Syrian boy and films it in graphic video for 'propaganda purposes'
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Why this year's general election was the most unfair in Britain's history
iJobs Money & Business
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...