Global regulators close in on six banks with imminent fines over forex probe

UK, US and Swiss regulators finalising details of an 18-month investigation into forex market

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The Independent Online

The six banks allegedly involved in the rigging of the £3 trillion-a-day foreign exchange market face a triple whammy of multi-million pound fines and penalties tomorrow as US and Swiss regulators join forces with the City’s top watchdog.

The Financial Conduct Authority, the US Commodity Futures Trading Commission and Switzerland’s Finma are finalising details of an 18-month investigation and the penalties they will impose on the banks.

With the FCA expected to fine the six up to £1.5 billion it has emerged that the CFTC could add a further £1 billion to the bill while Finma is likely to punish only UBS.

Barclays, HSBC and Royal Bank of Scotland, along with Citigroup, JP Morgan and UBS, could be fined an average of $300 million apiece by the CFTC.

The scale of fines will vary according to the depth of involvement of each bank in the alleged manipulation of forex markets. The FCA declined to comment and the CFTC was not available for comment.


The FCA had earlier told the banks it wanted to reach a settlement with all of them by the end of this month. Tomorrow is now the target. But one senior banking source cautioned that last-minute negotiations were continuing and that a deal might still slip into next week.

Three of the banks were hit by huge fines by the CFTC over the separate and earlier Libor rigging scandal. Barclays was penalised $200 million, RBS $325 million and UBS $700 million. Finma also fined UBS Swfr59 million (£38 million) over Libor.

The Libor investigation was spearheaded by the CFTC with back up from the US Department of Justice and the FCA. In the forex investigation it has been the FCA which has lead the investigation with support from US and other global regulators.

Tomorrow’s potential settlement could also include the Office of the Comptroller of the Currency in Washington, an offshoot of the US Treasury which regulates banks. Hong Kong regulators have also been running investigations.

Banks made varying provisions for the expected settlements in their recent third quarter results. While HSBC said it had put aside $378 million specifically for the FCA inquiry, Barclays’ £500 million provision was for the FCA and one other unnamed regulator while RBS’s £400 million provision did not specify which regulators it covered.