Germany’s financial regulator Bafin revealed that it had found solid evidence that shows traders colluded to fix benchmark rates, enjoining more banks to its investigations.
Industry watchdogs all over the world have been investigating traders for evidence of malpractices in foreign exchange, interest rates and commodities trading. So far, eight major banks have been slapped with fines running into billions of dollars for fixing reference interest rates (Libor). It is widely expected that the current investigation into the forex market will see even bigger fines, reported Reuters.
German Federal Financial Supervisory Authority’s banking supervision Chief Raimund Roeseler revealed what he had seen in the forex probe is very worrying and that it will exceed the probe into benchmark interest rates, including Libor.
“There were clearly attempts to manipulate the prices, that’s what was disturbing,” said Roeseler during the watchdog’s annual news conference. “It’s not the really big currencies, not the dollar/euro, but several currencies were involved,” he said, revealing the Mexican peso was also involved.
Over 30 forex traders in most major banks in various countries have been suspended, fired or sent on leave as the forex investigations deepen. The Britain’s Financial Conduct Authority revealed last month that it was yet to discover whether there was malpractices in the foreign exchange market.
Roeseler confirmed that local banks that engage in forex trading have been directed to carry out internal investigations and produce their findings to Bafin. He also said the investigation may be around for a sizeable duration of time, probably before 2018.
Germany’s biggest bank Deutsche Bank, which is also the world’s biggest forex trader, is the only lender in the country that is known to be enjoined in the investigation. It has repeatedly insisted that it is helping authorities with the investigation and that it is carrying out its own internal investigations. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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