'Banks Around the World' Probed in Currency Scheme
Swiss regulators looking into alleged plot to rig Forex
By Kevin Spak, Newser User
Posted Oct 4, 2013 8:29 AM CDT
A screen indicates the US dollar against the Japanese yen, top, and Nikkei 225 index, bottom, at a foreign exchange company in Tokyo in this May file photo.   (AP Photo/Kyodo News)

(Newser) – Is this the next Libor? Switzerland's top market regulator has announced a sweeping investigation into an alleged conspiracy to rig benchmark currency exchange rates, the Wall Street Journal reports. The regulator, Finma, says it's investigating "several" Swiss firms, but is also "coordinating closely with authorities in other countries, as multiple banks around the world are potentially implicated." British regulators have previously announced a similar investigation, and sources tell Bloomberg that they've requested information from Deutsche Bank and Citigroup, the world's top two currency traders.

This summer, Bloomberg reported that bankers were allegedly rigging the rates by pooling information via instant message and pushing through big trades before and during the 60-second windows in which rates are set, and the activity in these periods has often looked suspicious. But traders say that's a natural time to trade to hedge against client moves. "If you try to hedge afterwards, you're an idiot,"one says. But, the Journal points out, traders said similar things when irregularities started showing up in Libor.

More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
'Banks Around the World' Probed in Currency Scheme is...
Show results without voting
You Might Like
Showing 3 of 17 comments
Oct 12, 2013 11:11 AM CDT
Corrupt bankers??? Now I've seen everything PS This is the last you will ever hear about this.
Oct 11, 2013 10:25 AM CDT
Keep the change. I'll take the folding money.
Oct 7, 2013 10:19 AM CDT
Other than the banks that get spanked, this is not a big deal in the currency markets. "Roughly 1% to 2% of the $5.3 trillion-a-day in global currency trading is conducted at this fix," http://online.wsj.com/article/SB10001424052702304906704579114772920668870.html Few companies, banks, or individuals would have been affected by this. The blip on the chart in the link shown was 1/10th of 1% for a few minutes. Stocks in the U.S. stock market are manipulated multiples of this. This was illegal and should draw regulatory fire, but in the scheme of things. not a big deal.