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Five global banks to pay €5 billion for rate rigging

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By Euronews
Five global banks to pay €5 billion for rate rigging

Five of the world’s biggest banks have been fined over 5 billion euros.

Four of the banks: Citigroup, JP Morgan Chase, Royal Bank of Scotland and Barclays pleaded guilty to
manipulating the foreign exchange market.

The US Justice Department said traders at the banks described themselves as “The Cartel” and used coded language to influence exchange rates and increase profits.

“This behaviour by traders who were very senior, who were acting on behalf of the parent banks, which enriched the parent banks significantly, was so systemic and so egregious that we felt the entire institution had to take responsibility at the highest levels,” Loretta E. Lynch, US Attorney General, told reporters.

The fifth bank, Zurich-based UBS, pleaded guilty to a different count of wire fraud.

The justice department has been negotiating with the banks for months over how to resolve the forex allegations.

“At this latter stage, it’s debatable how much reputational damage is going to continue to be done as investors and traders tend to gloss over the total figures,” said market analyst Alastair McCaig. “As far as the banks themselves are concerned, it does mean that we are, I guess, a step closer to them being able to draw a line in the sand over some of these irregularities and these indiscretions.”

In total, US authorities fined seven banks over ten billion euros for failing to stop their traders sharing information about client orders and coordinating trades to boost their own profits.

The investigation has pushed the foreign exchange market closer to automated trading.