Two of the most powerful watchdogs in the US have sent investigators into the London headquarters of the giant bank Citigroup as the probe into alleged manipulation of global currency markets.
The US Federal Reserve and the Office of the Comptroller of the Currency, an independent arm of the US Treasury, have been in the company's Canary Wharf base over the past week, according to US reports.
News of the stepping-up of the investigation came on the day Deutsche Bank suspended several currency traders in New York as part of an internal probe into the alleged scandal which is now being investigated by a host of global regulators.
Only last week Citi fired its head of European spot foreign exchange trading, Rohan Ramchandani, after a prolonged period of leave.
Sources told Reuters the US investigators were at the early stages of an information- gathering operation and that their presence was "independent" of the former trading boss's sacking. A spokesman for Citigroup declined to comment.
Last year the UK's Financial Conduct Authority began a formal investigation into possible manipulation in the $5.3trn (£3.3trn)-a-day global FX market. The US Justice Department is also engaged in an active investigation of any irregularities in the market, the world's largest. Deutsche Bank said it would not comment on individual staff members but issued a statement saying: "Deutsche Bank has received requests for information from regulatory authorities that are investigating trading in the foreign exchange market. The bank is co-operating with those investigations, and will take disciplinary action with regards to individuals if merited."
Benchmark foreign exchange rates, often referred to as fixes, are a cornerstone of global financial markets, used to price trillions of dollars worth of investments and deals and relied upon by companies, investors and central banks.
The foreign exchange case adds to Deutsche Bank's troubles after it had to pay a fine of €725m (£604m), levied by European Union anti-trust regulators for interest rate manipulation in December. The bank has also been named in cases related to the sub-prime crisis, credit default swaps, mortgages, tax evasion and the decade-old Kirsch lawsuit.
The list of scandals and investigations has put the bank's two chief executives, Juergen Fitschen and Anshu Jain, under pressure to clean house and brought them into conflict with regulators and the German finance ministry over the slow pace of reforms.
Deutsche, Citigroup, UBS, Barclays, Royal Bank of Scotland, JP Morgan and others have all said they are co-operating with regulators scrutinising the market.
Citigroup, RBS, JP Morgan and Standard Chartered have already fired, suspended, or put currency traders on leave.
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