Regulators fine global banks $3.4 billion in foreign currency probe

U.S., British and Swiss regulators have collectively fined five global banks more than $3 billion for attempted manipulation of foreign exchange markets. The U.S. Commodity Futures Trading Commission, the UK Financial Conduct Authority (FCA) and the Swiss Supervisory Markets Authority said Wednesday that they had fined Citibank, JPMorgan Chase Bank, Royal Bank of Scotland, HSBC Bank and UBS a total of $3.4 billion.

Today’s record fines mark the gravity of the failings we found and firms need to take responsibility for putting it right. They must make sure their traders do not game the system to boost profits.

Martin Wheatley, FCA chief executive

The regulators found that between Jan. 1, 2008 and Oct. 15, 2013, traders at the five banks formed groups that shared information about client activity. Some $5.3 trillion changes hands every day on the global foreign exchange market, with 40 per cent of trades occurring in London. Dollars, euros and yen are traded in the loosely-regulated market dominated by a group of elite banks. But those trades have wider impact because companies around the world use market prices to value assets and manage currency risks.

Traders shared the information obtained through these groups to help them work out their trading strategies. They then attempted to manipulate fix rates and trigger client ‘stop loss’ orders.

A statement from the FCA

Business regulators