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Five banks are to pay $5.8 billion in fines over market rigging

by , 21 May 2015

Five of the world's largest banks are facing fines amounting to almost $6 billion. This follows investigations into currency rigging.

Four of the banks' fines relate to forex market rigging. The other bank's fine relates to the rigging of benchmark interest rates.

Let's take a closer look at what happened…


For five years, currency traders manipulated the forex market


Five of the world’s largest banks will now have to pay multimillion dollar fines after pleading “guilty to charges tied to a currency rigging probe,” reports Bloomberg.

The banks which plead guilty to forex market rigging are “JPMorgan, Barclays, Citigroup and RBS,” says the BBC. UBS “plead guilty to rigging benchmark interest rates”.

UBS avoided the currency rigging probe as it was “the first to cooperate with antitrust investigators,” says Bloomberg.

Loretta Lynch, US Attorney General, “said that ‘almost every day’ for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates,” adds the BBC.

The four banks manipulating the currency market “are among the world’s biggest foreign exchange traders,” reports BDLive. The US Justice Department said that via online chatrooms, traders discussed “their positions before rates were set and suppress[ed] competition in the market”.


Barclays will pay a whopping $2.4 billion fine


Barclays faces the largest fine out of the banks at $2.4 billion, says Business Insider. The banks have to pay the fines to the Department of Justice and the Federal Reserve.

The Federal Reserve also fined the “Bank of America $205 million over foreign exchange rigging,” notes the BBC.

And now investigations into forex trading are underway in South Africa.

The Competition Commission is currently probing SA banks “for allegedly manipulating foreign exchange trades,” says MoneyWeb. This includes “Barclays Africa, JPMorgan South Africa and Investec Ltd”.

The commission says it’s investigating these banks for “directly or indirectly fixing prices in relation to bids, offers and bid-offer spreads in respect of spot, futures and forwards currency trades,” adds MoneyWeb.

So yet more fines for the world’s big banks.

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Five banks are to pay $5.8 billion in fines over market rigging
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