In a move that stunned the City, Barclays today opted out of the £2.1 billion foreign exchange market-rigging settlement by five rival banks.
The bank, which was the first to reach an agreement over the early Libor scandal which cost chief executive Bob Diamond his job, said it wanted to settle with all regulators in one go.
But this meant that it has already lost a multi-million pound discount offered by the Financial Conduct Authority.
The five banks which settled today — Citibank, HSBC, Royal Bank of Scotland, JPMorgan and UBS — collectively received a £500 million discount, or 30 per cent of the initial fines of £1.6 billion set by the FCA, led by Martin Wheatley.
The five have been fined a further $1.5 billion (£930 million) by one US regulator and UBS Swfr134 million (£87 million) by the Swiss bank regulator.
Barclays said: “Barclays has engaged constructively with its regulators, including the FCA and the US Commodity Futures Trading Commission in this round of settlement discussions, and has considered a settlement from these agencies on closely similar terms to those announced this morning.
“However, after discussions with other regulators and authorities, we have concluded that it is in the interests of the company to seek a more general coordinated settlement.”
Bank sources said that Barclays could face a far higher fine from a US regulator not involved in today’s deal and is negotiating to keep that down.
Other regulators are still investigating alleged manipulation of the £3 trillion-a-day forex market. Barclays and the other five banks potentially face further massive fines from the US Department of Justice, the Securities and Exchange Commission, the Office of the Comptroller of the Currency and New York’s Department of Financial Services.
The Serious Fraud Office has been running a parallel criminal investigation into the forex market since July.
But the FCA today blew apart a world of traders acting together to fix benchmark exchange rates, calling themselves names like “the players”, “the 3 musketeers”, “1 team, 1 dream”, “a co-operative” and “the A-team”.
Tracy McDermott, head of enforcement at the FCA, said: “Firms could have been in no doubt, especially after Libor, that failing to take steps to tackle the consequences of a free-for-all culture on their trading floors was unacceptable.”
RBS today said that more than 50 current and former traders as well as dozens of supervisors and senior management were still under investigation by the bank.
It was also today fined £2.7 million by the Irish central bank for IT failures at Ulster Bank.Reuse content