HSBC among five banks fined US$3.4 billion for rigging foreign exchange market

US, British and Swiss regulators fined HSBC and four other global banks more than US$3 billion for attempting to manipulate foreign exchange markets - the latest penalties for an industry previously criticised for rigging interest rates and for their role in triggering the global financial crisis.

The US Commodity Futures Trading Commission, the UK Financial Conduct Authority and the Swiss Financial Market Supervisory Authority said Citibank, JPMorgan Chase, Royal Bank of Scotland, HSBC and UBS had agreed to settlements totalling almost US$3.4 billion. The FCA said it was continuing to investigate Barclays Bank.

"Today's record fines mark the gravity of the failings we found, and firms need to take responsibility for putting it right," Martin Wheatley, chief executive of the FCA said yesterday. "They must make sure their traders do not game the system to boost profits."

Some US$5.3 trillion changes hands every day on the global foreign exchange market, with 40 per cent of trades occurring in London. Those trades have an impact on companies around the world that use market prices to value assets and manage currency risks.

The regulators found that between January 1, 2008, and October 15, 2013, the five banks failed to adequately train and supervise foreign currency traders. As a result, traders at the banks were able to form groups that shared information about client activity, using nicknames such as "the players, "the 3 musketeers" and "1 team, 1 dream".

The traders tried to manipulate the market to ensure that their banks made a profit, the Financial Conduct Authority said.