Switzerland probes banks over possible forex rigging

Fri Oct 4, 2013 4:07pm EDT
 
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By Caroline Copley and Albert Schmieder

ZURICH (Reuters) - Switzerland's financial markets regulator is working with authorities in other countries to investigate possible manipulation in the $5 trillion-a-day foreign exchange market potentially involving multiple banks.

Regulators and investors are concerned about the integrity of financial benchmarks in the wake of a global investigation into the rigging of benchmark interest rates that has so far led to four financial firms, including Switzerland's largest bank UBS, being fined around $2.7 billion and seven men being charged.

"FINMA is currently conducting investigations into several Swiss financial institutions in connection with possible manipulation of foreign exchange markets," the Swiss regulator said in a statement on Friday.

"FINMA is coordinating closely with authorities in other countries as multiple banks around the world are potentially implicated."

Switzerland's competition commission WEKO also on Friday said it had opened a preliminary investigation after learning about potential manipulation of foreign exchange markets by banks. They declined to name the banks under investigation.

The Swiss federal prosecutor's office said it was in contact with FINMA about the issue.

UBS and Credit Suisse declined to comment. Zuercher Kantonal Bank said the bank was currently not aware of a FINMA investigation. Marc Buerki, CEO of Swiss foreign exchange broker Swissquote, said it was not part of the investigation.

Britain's Financial Conduct Authority (FCA) said in June it was examining allegations banks had manipulated foreign exchange benchmarks by trading ahead of their own customers' orders, a practice known in the markets as "front running".   Continued...

 
A general view shows the city of Zurich, Lake Zurich and the eastern Swiss Alps September 2, 2013. REUTERS/Arnd Wiegmann