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Five banks fined £2 billion after currency rigging investigation


UK, US and Swiss authorities have fined five banks more than £2 billion after widespread manipulation by the banks traders in the foreign exchange markets.

The Financial Conduct Authority (FCA) , the US Commodities and Futures Trading Commission (CFTC) and Swiss regulator Finma have fined the Royal Bank of Scotland, HSBC, Citigroup, JPMorgan and USB for "ineffective controls at the banks" which allowed traders "to put their banks’ interests ahead of those of their clients".

The FCA believes that the banks failings have undermined the publics confidence in the financial system.
According to settlement notices released on Wednesday, bank employees formed groups in which information was shared about client activity in breach of market rules.

Martin Wheatley, chief executive of the FCA, said:
“The FCA does not tolerate conduct which imperils market integrity or the wider UK financial system.”

George Osborne, UK chancellor, said:
“Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone. It’s part of a long term plan that is fixing what went wrong in Britain’s banks and our economy.”

All of the FCA fines were above £216m, which make them the highest FCA penalties ever imposed, breaking the record previously held by UBS, which paid £160m to the FCA in 2012 over libor rigging.

All five banks have said that they are troubled by the misconduct and are making improvements to the systems and controls to better handle against improper trading behaviour.

The FCA probe has brought to light rigging from banks all over the world, and 15 banks are now being probed by 20 regulators worldwide. Experts believe this is just the beginning of what is expected to be a long running scandal that will continue to unnerve the worlds leading traders for months to come.

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