On Friday, the Financial Stability Board issued a statement that it will be reviewing the foreign exchange markets in light of the investigations in the alleged currency rates manipulation by some traders. The board, which was established by developing nations bloc Group of 20, will be examining the process on calculating for foreign exchange rates and the industry market practices.
The group said, "Recently, a number of concerns have been raised about the integrity of foreign exchange rate benchmarks. The F.S.B. has consequently decided to incorporate an assessment of FX benchmarks into its ongoing program of financial benchmark analysis."
The FSB has joined the New York State Department of Financial Services and other regulators to investigate the allegations of manipulation of foreign exchange currency rates, which are based on real trades.
FSB, whose chairman is Bank of England governor Mark Carney, has been working to make sure that the global benchmark exchange rates maintain reliability and transparency after the industry was rocked with a series of scandals involving the manipulation of London interbank offered rate and other benchmark rates, DealBook said. In the last two years, banks across the globe had shelled out billions of dollars in fines due to their involvement in the rate manipulation.
In an earlier report by the DealBook, Financial Conduct Authority chief executive Martin Wheatley said at a parliamentary hearing that the foreign currency rate manipulation was as bad as the Libor scandal, prompting concerns and immediate actions from banks.
Over a dozen currency traders belonging to some of the largest banks in the world, which include Barclays, JPMorgan Chase and UBS, were on forced leave over concerns that they have been involved with the benchmark currency rates manipulation. The biggest players in the currency trading market, Deutsche Bank and Citigroup had fired their employees as a result of their own internal probes, although no one has been hold responsible, DealBook recalled.
