UBS, RBS, JPMorgan, Citi, Barclays, HSBC heading towards EU settlement for FX rate rigging cartel

FX settlement

The Financial Times is reporting that several of the world’s leading banks are heading towards final negotiations on a financial settlement (read:fines) with the European Commission, following a more than four year long probe into allegations they formed a cartel to rig the $5 trillion global FX market.

The FT named UBS, RBS, JPMorgan, Citigroup, Barclays, and HSBC as six of the eight banks involved in the settlement negotiations, which are likely to results in billions of Euros in fines – likely more than the €2 billion banks were fined in an earlier but somewhat similar interest rate rigging scandal.

The current FX probe by the EU follows similar investigations by US, UK ans Swiss authorities, which have fined global banks a total of more than $10 billion for these offences.

The FT cites a Boston Consulting Group report stating that financial institutions have paid more than $320 billion (!!) in penalties since 2008.

The settlement discussions may still take several more months, as the investigations leading to the talks have been very complicated, given the very global and complex nature of FX markets.

Also, the EU has shown tremendous leniency to “whistleblowing” members of a cartel which decide to turn themselves (and the rest of the cartel) in to authorities, and it remains unclear as of yet if there will be such leniency in the eventual fines handed out during this go-around.

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