FX traders at some of the world’s largest banks have been given the cold shoulder in response to the ongoing FX rates scandal. Reports in the UK’s national press have stated that traders at tier 1 banks have been suspended in connection with the rates investigation.
After the never-ending LIBOR fixing debacle, banks that thought they were off the hook were in for an unwanted surprise with the FX rates manipulation enquiry adding salt to their wounds.
Two of the UK’s leading banks, RBS and Barclays are thought to have suspended FX traders, as reported in Reuters and the BBC. Investigations have been in full force as regulators from across the developed world have been looking into the multi-billion issues.
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The manipulation of rates could have detrimental effects on the world economy, as major instruments are priced on the back of FX rates or fixes. Furthermore, London’s role as the epicentre of global trade and finance could be questioned. The city hosts 40% of FX trading according to the latest BIS Triennial Survey.
Traders from Standard Chartered, JP Morgan and Citi are under investigation and have been put on leave, according to sources close to the matter.
“Government agencies in the U.S. and other jurisdictions are conducting investigations or making inquiries regarding trading on the foreign exchange markets. Citigroup has received requests for information and is cooperating with the investigations and inquiries and responding to the requests,” Citi said in a regulatory filing.