- 20 May 2015
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The five largest banks in the world to pay a fine totaling $ 5.7 billion for the manipulation of the currency market, the US government reported.
Four of these banks JPMorgan, Citigroup, Barclays and RBS admitted guilt in conspiracy to manipulate the currency markets.
Fifth, UBS, pled guilty to manipulating interbank lending rate LIBOR, used by global markets as a benchmark for determining interest rates on financial products.
The largest amount – $ 2.4 billion – will pay Barclays , who was not involved in the deal with regulators in Britain, the US and Switzerland in November.
Barclays also dismisses eight employees involved in illegal manipulation.
US Attorney General Lorretta Lynch said that almost every day for five years, starting in 2007, currency traders manipulated exchange rates, using a special chat.
Their actions caused damage “to countless consumers, investors and organizations around the world,” she said.
Cartel
Within five years, currency traders when chatting, which they called “Cartel”, agreed to hold bids or offers for the purchase of the euro and the dollar up to a certain time, to protect the trading positions of each other, says the Ministry of Justice.
The name of the chat “accurately describes the blatant illegal conduct, which they did almost every day”, – quotes the US Attorney General Loretta Lynch AFP.
“They acted as partners – not as rivals – seeking to influence the exchange rate in the direction favorable to their banks, but at the expense of many others, “- added Lynch.
In general, traders manipulated the exchange rate at the close of trading in the 30 seconds before and after 16:00 in London.
The exchange rate “4pm London fix” is set to enable investors to evaluate companies and their foreign currency assets and liabilities.
According to the tradition at this moment trades are particularly intense, and many bank customers , including large companies, applying for foreign exchange, asking to postpone the transaction up to this point, says Deutsche Welle.
If traders from other banks will know in advance about the upcoming major transactions, they will be able to play on the change in the exchange rate and the benefit.
According to experts, the admission of guilt by banks is a very significant event, as the bank had previously entered into an agreement with regulators without admission of guilt.
“regain the trust”
The head of the bank’s RBS Ross McEwan said ” serious misconduct underlying the announcement today, there is no place in the bank that I want to build “.
” A confession of guilt in these actions – another reminder of how the bank lost and how important it is for us to return trust “, – he added.
Head of Barclays Antony Jenkins said:” A misdemeanor, became the focus of the investigation, it is absolutely not compatible with the goals and values of Barclays, and we are sorry that it happened. I share the frustration of colleagues and shareholders due to the fact that some people have brought our company and the industry into disrepute “.
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