Analysis | US and UK forex probes could bring more pain to banks

The US$4.3 billion in civil settlements struck on Wednesday between six global banks and US and British authorities over foreign exchange market manipulation sets the stage for negotiations over related probes that could bear much more severe consequences.

Citigroup, UBS, HSBC, Royal Bank of Scotland, JP Morgan Chase and Bank of America agreed to make the payment to settle civil claims that they failed to stop traders from trying to rig the foreign exchange market.

But the deal did not resolve an advanced criminal probe from the US Department of Justice nor an investigation from New York's powerful banking regulator, Benjamin Lawsky, who has a reputation of helping extract record monetary settlements from global banks.

Sources familiar with the matter say the justice department could bring its first criminal charges early next year, and that Lawsky could take action against banks under his jurisdiction before his expected departure, which may come early next year.

Wednesday's deal appears to be the tip of the iceberg when it comes to further legal action, said Josh Rosner, managing director of Graham Fisher, a research consultancy. "Did they let anyone off of criminal liability? What was settled?" he said.

Former prosecutors also said criminal authorities have extensive evidence, based upon transcripts released by Britain's Financial Conduct Authority and US civil authorities of traders brazenly discussing attempts to manipulate foreign exchange rates.