According to a Bloomberg report, major global banks have been
notified by the regulators that enforcement actions are being
planned against them for allegedly rigging the currency rates. At
the same time, talks to settle those investigations are also in
progress between the banks and the U.S. Federal Reserve and the
Office of the Comptroller of the Currency.
The enforcement actions could lead to cease-and-desist orders,
penalties or banning of bankers from the industry. Additionally,
banks like JPMorgan Chase & Co. (
), Citigroup Inc. (
) and Morgan Stanley (
), among others, have been sent letters outlining the exact finding
and a note of caution regarding imminent enforcement actions. The
banks have 15 days to reply in defense.
Along with the U.S. regulators, U.K.'s Financial Conduct Authority
(FCA) is also involved in settlement talks with major banks
including Citigroup, JPMorgan, Barclays PLC (
), HSBC Holdings plc (
), The Royal Bank of Scotland Group plc (
) and UBS AG (
Regulators across the globe are dealing seriously with the
allegations of banks rigging WM/Reuters rates, which are used for
determining foreign exchange prices. Also, several banks conducted
internal investigations and handed over the findings to the
regulators. Based on these internal probes, banks fired/suspended
several bankers for their alleged role in rigging WM/Reuters rates.
WM/Reuters rates are published hourly for 160 currencies and
half-hourly for the 21 most-traded ones. Hence, it is a
widely accepted standard, the rigging of which will necessarily
undermine the importance of the rate and result in negative
The law-enforcement agencies are trying fast-track settlements with
the banks in order to avoid lengthy litigations. According to us,
this will favor the banks too, as many of them are currently facing
several other probes and litigations, thus hampering their
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