Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Fed scrutinizing banks, foreign exchange rates
WASHINGTON (1/14/14)--The Federal Reserve is joining a multilateral probe into alleged foreign exchange rigging by employees for some of the world's biggest banks.
The inquiry, which is said to involve at least 12 banks, could result in the Fed levying fines for improper internal controls (Bloomberg Jan. 13).
The U.S. Justice Department, Britain's Financial Conduct Authority and the Swiss Competition Commission have been investigating the matter since June, when Bloomberg reported on the alleged decade-long scheme.
The Fed declined Bloomberg's request for a comment, but it is believed the inquest involves Deutsche Bank AG, Citigroup Inc., Barclays Plc and UBS AG. The quartet controls more than half of the $5.3 trillion daily foreign exchange market, according to a May report by Euromoney Institutional Investor.
Barclays, Citigroup and the Royal Bank of Scotland Group Plc have already launched internal investigations. Citigroup announced last week that it fired Rohan Ramchandani, former head of European spot trading. Ramchandani allegedly was part of an industry message group known as "The Cartel."
JPMorgan Chase & Co., Barclays and Citigroup also told officials at the New York Fed, according to Bloomberg, that it could change its practices as a result of the investigation.
The benchmarks at the center of the probe are WM/Reuters rates, which affect assets around the world.
The Fed's regulatory scope focuses on banks' risk management practices. If it finds inadequate internal controls, the central bank can issue orders, impose fines, remove executives and bar them from the industry. The Fed recently fined JPMorgan $200 million in case related to multi-billion dollar "London Whale" losses. It has also fined RBS $50 million for failing prevent commerce with countries subject to U.S. sanctions.
Law enforcement officials are also said to be looking at alleged manipulation of other key market-moving rates, such as the London interbank offered rate, LIBOR, and a rate that affects interest rate derivatives, called ISDAfix.

RSS print
News Now LiveWire
Large CU stress testing on the agenda for the April @theNCUA open meeting
3 hours ago
#FinancialLiteracyMonth Test your college financial aid knowledge @nasfaa
11 hours ago
Join @theNCUA #NCUAchat with @KenWortheyJr on April 23 from 11am to 12pm EST #FinancialLiteracyMonth
12 hours ago
Maine's patent troll bill has become law. Read more in Monday in @NewsNowLiveWire
15 hours ago
Wash. DFI discusses serving legal marijuana businesses with @NWCUA
15 hours ago