Date
21 September 2017
HSBC is among the global banks facing scrutiny over  rate-setting practices in the forex markets. Photo: Bloomberg
HSBC is among the global banks facing scrutiny over rate-setting practices in the forex markets. Photo: Bloomberg

German watchdog finds evidence of forex rate-fixing

Germany’s financial watchdog said on Tuesday that it has uncovered concrete evidence that banks had tried to manipulate the reference rates in foreign exchange markets, in a sign that authorities are widening the probe into the rate-rigging scandal.

Reuters quoted Raimund Roeseler, the head of banking supervision at German watchdog Bafin, as saying that the latest discoveries in the forex probe were worrying and it was “much, much bigger” than the investigation into benchmark interest rates, such as Libor.

“There were clearly attempts to manipulate prices, that’s what was disturbing,” Roeseler was quoted as saying Tuesday at the regulator’s annual news conference. Market participants had attempted to manipulate daily fixing rates for a number of different currencies, he said.

Meanwhile, HSBC, Crédit Agricole and JPMorgan were charged by Brussels on Tuesday for participating in a cartel to manipulate the Euribor interest rate benchmark, after the trio held out against a settlement last year, Financial Times reported.

“We’ve reached the preliminary conclusions that these banks were participating in the cartel,” Joaquín Almunia, the EU competition commissioner, was quoted as saying. All three banks deny wrongdoing over Euribor.

Senior bankers told FT that they fear the forex probes could lead to another round of multibillion dollar penalties echoing the punishment meted out in the Libor-rigging scandal, which has so far cost the industry a total of US$5.8 billion in fines.

Last year Deutsche Bank, Société Générale and Royal Bank of Scotland admitted to colluding to manipulate Euribor. They were fined a total of about 1 billion euro. But those fines were reduced by a tenth as the banks agreed to settle the case, FT noted.

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