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In the wake of forex rates manipulation investigations, senior management patience runs thin
Following our report last week that several pairs were affected in the alleged currency rates manipulation of the 4 pm fix.Some new information was sourced in a report by Reuters titled “Banks consider ban on chat rooms after rigging probe” shed light on considerations by big financial firms such a s JP Morgan Chase (NYSE:JPM), Credit Suisse Group (NYSE:CS) and Citigroup Inc. (NYSE:C) to forbid their employees to use chat rooms for communication.
As regulators are proceeding with their investigations and several banks are launching internal probes, senior management seems to bar their employees from participating in chat rooms.
Aside from being another proof that there is some meat behind these investigations, potential banning of chat rooms would reaffirm that it is the most likely place where alleged collusion talks by various traders across the business happened. The article goes on to remind us that online chat rooms were one of the pillars supporting the Libor manipulation investigations.
Banks must be puzzled themselves as to the amount of documented communication through third party services such as Thomson Reuters and Bloomberg LP terminals. Then again if these means are banned, how future collusions would be prevented, there are tons of ways to communicate nowadays…
One cannot help but notice that all of these occurrences have been escaping internal controls and regulators’ attention for such a long period of time. Will it matter much to the outraged public that banks are now being punished and are admitting to wrongdoing as they already did with the Libor probe?
Only time will tell whether regulators will be able to establish some sort of credibility and show capacity to limit the plethora of wrongdoings by the financial sector heavyweights that are being uncovered these days. Every couple of days the probe gets thicker and thicker. Stay tuned to LeapRate as we keep the news flow going.
Following is a link to the full article by Reuters.