This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-32817114
The article has changed 7 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
Record fines for currency market fix | |
(36 minutes later) | |
Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn) for manipulating the foreign exchange market, US officials say. | |
Four of the banks - JPMorgan, Citigroup, Barclays, RBS - have agreed to plead guilty to US criminal charges. | |
The fifth, UBS, will plead guilty to rigging benchmark interest rates. | |
Barclays was fined the most, $2.4bn, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators. | |
US Attorney General Loretta Lynch said that "almost every day" for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates. | |
Their actions harmed "countless consumers, investors and institutions around the world", she said. | |
Cartel threat | |
Regulators said that between 2008 and 2012, several traders formed a cartel and used chat rooms to manipulate prices in their favour. | |
One Barclays trader who was invited to join the cartel was told: "Mess up and sleep with one eye open at night." | |
Several strategies were used to manipulate prices and a common scheme was to influence prices around the daily fixing of currency levels. | |
A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities. | |
'Building ammo' | |
Until February, this happened every day in the 30 seconds before and after 16:00 in London and the result is known as the 4pm fix, or just the fix. | |
In a scheme known as "building ammo", a single trader would amass a large position in a currency and, just before or during the fix, would exit that position. | |
Other members of the cartel would be aware of the plan and would be able to profit. | |
"They engaged in a brazen 'heads I win, tails you lose' scheme to rip off their clients," said New York State superintendent of financial services Benjamin Lawsky. |