April 19, 2015 / 11:54 PM / 4 years ago

Some banks tried to renege on deals after SNB's policy U-turn: Bloomberg

A Bank Of America sign is pictured in the Manhattan borough of New York August 21, 2014. REUTERS/Carlo Allegri

(Reuters) - After the Swiss National Bank abandoned its price cap on the franc in January, some dealers such as Bank of America Corp (BAC.N), Barclays Plc (BARC.L) and Goldman Sachs Group Inc (GS.N) approached customers about changing some trades, Bloomberg reported, citing people familiar with the discussions.

The banks sought to reduce their losses by trying to renege on transactions by contacting customers after the SNB decision, asking to discuss the rates they’d traded on, Bloomberg said.

Some currency trading firms and major banks lost out when the SNB scrapped its three-year-old cap on the franc against the euro EURCHF=EBS without warning on Jan. 15. Barclays lost “tens of millions” of dollars and retail broker Alpari UK filed for insolvency.

The banks’ attempts to reopen deals present their rivals such as electronic trading venues and established exchanges with a new argument - do business through us rather than dealers who can cancel or alter your trades after they have been executed, Bloomberg said.

Buying and selling currencies commonly takes place between a bank and its customer through over-the-counter trading, which is largely unregulated, giving the banks freedom in how they operate.

The three banks did not immediately respond to requests for comment outside regular business hours.

Reporting by Supriya Kurane in Bengaluru; Editing by Eric Walsh

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