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FX scandal: in the spotlight


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The market tremors from the FX-fixing scandal and subsequent probe – triggering a flurry of fines, litigation cases and prosecutions – is set to reverberate for years to come. Euromoney investigates the fallout for global banks and possible reforms.

Harriet_Hunnable-160x186It is time to pick up the pace on Libor transition
June 2019
Cash borrowers want forward-looking reference rates to transition to after Libor and the market is struggling to come up with them. 

Treasurers need to limber up for Libor reform
June 2019
mouse-trap-cheese-780Benchmark reform may have received a lukewarm welcome from corporates, but treasurers would be well advised to quantify their Libor exposures to avoid nasty surprises during the transition to alternative overnight risk-free rates. 

FSB: Libor ‘will not be sustainable’ after 2021
November 2018 

It is one thing to develop alternative benchmarks to Libor, but, even as the clock is ticking, it is quite another to get issuers to use them.

Don’t bank on Euribor surviving 2020
October 2018 

Euribor’s administrator is confident that its reforms to the benchmark will make it eligible to be published and used after the Benchmark Regulation’s transition period ends. But don’t bank on it.

Do you believe in life after Libor?
October 2018
Progress has been made on possible replacements for Libor as a reference rate for financial instruments. But they don’t all have the market thrilling to the prospect of a Libor-less world.

Libor challengers: ARRs get a boost in August
August 2018
August, typically a slow month for capital markets, was a fruitful one for alternative reference rates (ARRs) to Libor.

Libor: Changing the frame of reference
July 2018
There’s a rush to find an alternative to ‘ibors’, but with just three years to go before banks might stop submitting Libor altogether, regulators and market participants are still trying to figure out the right questions to ask.

Why the conviction of an FX banker has huge implications for all market participants
June 2018

Kevin Rodgers gives his personal views on the trial and conviction of FX banker Mark Johnson and its ramifications for global markets. Anyone working in banking should consider what it means for them.

FX Survey 2018: Banks go back to nuts and bolts
May 2018

With a spike in volatility and the opportunity to consign conduct issues to the past, this might have been a turning point for global FX, but faced with a range of challenges, many market makers are retreating to core competencies.

Scaling back forex businesses should be welcomed
May 2018

Banks are having to pedal back on big ambitions and focus instead on core competencies, but that could be positive for all.

FX: Market struggles to interpret global code
May 2018
The Global Foreign Exchange Committee (GFXC) is trumpeting the fact more than 100 market participants have made statements of commitment to the FX global code, but these organizations face obstacles to maintain adherence, according to consultants.

Former RBC FX trader suing bank for £13 million
May 2018

A senior currency trader fired from Royal Bank of Canada is taking the bank to task at an unfair dismissal hearing that includes accusations of sloppy trading, alleged bribery and an 'incoherent and inconsistent' global FX policy that he claims no one had bothered to read.

Last-look guidance felt as market prepares for FX code deadline
March 2018
Traders are having to manage a surge in the number of prices they handle, as counterparties implement FX code of conduct guidelines.

Whistleblowing: still a risky business
February 2018
Industry experts on whistleblowing have been lobbying hard for reform, but it is still often the case that whistleblowers with the best of intentions have found themselves in legal grey areas, ending up blacklisted, bankrupt and unable to work in the City again. 

Why the FX pool is still hard to navigate
February 2018

The forex market may have had a quiet 2017 with no big market dislocations, but liquidity is not as deep as it once was, while the buy side is becoming more discerning, driving changes in trading behaviour.

Positive global growth to drive currencies in 2018
December 2017
Global growth will be a key driver of currencies in 2018, a year in which the foreign-exchange industry will have to adapt to the strictures of Mifid II and a self-governing code of conduct.

FX global code adoption ‘slower than expected’

October 2017
Statements of commitment are gradually appearing, but many banks are still analyzing the provisions of the code against their own businesses before declaring adherence publicly.

BNPP pays $246 million to settle Fed’s FX probe
July 2017


BNP Paribas (BNPP) is the latest bank to be fined by US regulators over misconduct in its FX business. The French bank now hopes to put the episode behind it, having restructured the relevant businesses and improved its compliance processes.

FX global code: key points
May 2017
The final form of the FX global code came as little surprise, given the large number of practitioners involved in the drafting and consultation process, and the publication of the 55 principles on May 25 marked the formal launch of the code and the start of the adherence process.

FX global code registers to be live within months
May 2017
The newly formed global FX committee will issue guidelines and maintain an index of registers, but they will be run by the private sector.

FX industry given 12 months to implement global code
May 2017
New set of 55 principles replaces regional codes with a single blueprint for good conduct in global FX market.

2017: the biggest themes in FX
December 2016
'The aftermath of the currency scandal will still be felt in 2017.'
Regulation: The force will be with the rogue one
December 2016

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Amid all the calls for 2017 that get pumped out of research departments at this time of year, I have not seen any predictions for the return of the rogue traders.

2016: A rollercoaster year for foreign exchange
December 2016
2016 will be remembered as the year the people punished politicians at the polls, unleashing a torrent of volatility in financial markets, with currencies taking a huge hit. Here are the biggest currency stories of 2016.

Comms compliance race hots up
October 2016
Communications compliance is moving up the agenda for financial services firms, as the City's watchdog cracks the supervisory whip and the implementation deadline for MiFID II fast approaches

Restructuring a portfolio? How to avoid FX traps
September 2016

Transition management firms play a vital role in helping asset managers restructure large portfolios of securities and remove or replace underperforming managers, but past controversies are a reminder to clients they should not assume they are always getting the best deal on FX.

BIS stats: the steady decline of foreign exchange
September 2016
The FX business is officially shrinking for the first time since 2001, as the world's largest financial market battles an industry slowdown and a regulatory crackdown.

Brexit volatility fuels FX mis-selling claims
August 2016
Brexit-related currency volatility is fuelling a rise in foreign-exchange product mis-selling enquiries from businesses that have been burnt on ‘fiendishly complicated’ currency trades.

Macaskill on markets: Front-running and the death of fixed income
August 2016
The case against two HSBC employees for front-running a foreign exchange order from a client could hasten the death of the principal model for FICC trading by banks. A shift to an advisory-based approach is possible, but banks will struggle to make up lost revenue.


Sideways: The Committee to abolish Christmas trades
August 2016
When HSBC’s former head of global FX cash trading Mark Johnson learned that he had a window of just over 30 minutes to move the sterling exchange rate and profit from an approaching client trade, he said: “Ohhh f***ing Christmas,” according to US prosecutors.

Rodgers produces a book that’s worth shouting about
July 2016
Kevin Rodgers, the former head of foreign exchange at Deutsche Bank, has written a book about his 30 years in financial markets that should be read by anyone working in the industry today.

FX: Restoring trust – the global code is here
July 2016
The advent of a global code of conduct for the FX market should bring greater consistency, fairness and transparency to key industry practices.

Market players defend voluntary BIS FX conduct code
May 2016 
Advocates claim the principles-based approach offers the best hope of restoring trust in the FX market once and for all.

Structural shifts upend troubled FX franchises
May 2016
The foreign-exchange industry has been caught in a perfect storm of falling volatility, difficult trading conditions and regulatory challenges. Many of the senior figures in FX have stepped aside, leaving a new generation to come to terms with a radically different market.

FastMatch leading talks to create central tape for FX
May 2016
A group of FX electronic communication networks (ECNs) and market makers are working together to create a central tape for FX, modelled on a similar project for US equities, which they hope will increase transparency and democratize the currencies market, Euromoney can reveal.

FX: Fired currency traders fight back
April 2016
Citi woman-R-600
Ex-Citi trader Carly McWilliams’ employment tribunal win will spur on other fired currency traders waiting for their day in court and encourage more women to bring unfair dismissal claims, say legal experts. The banks’ argument that a handful of rogue traders acting behind senior managers’ backs were to blame for the currency rigging scandal is contested.

What next for Thomson Reuters’ FX benchmark?
April 2016
Thomson Reuters has acquired the WM benchmarks business, which has come through the considerable controversy around benchmarks and manipulation with its reputation largely intact.

FX: Hopes rise for whistleblowing cases
March 2016
Revelations of benchmark fixing and manipulation appear to have created a more favourable environment for FX industry participants to highlight suspected wrongdoing but the data tell a different story in the UK.

Global code key to tackling FX conduct, AFME conference told
February 2016
Certification could be withdrawn if participants do not abide by the global code of conduct, according to FCA’s Schooling Latter.

FX Working Group seeks to pre-empt blunt regulatory redress
February 2016
The global FX code of conduct being developed by the FXWG under the auspices of the Bank for International Settlements has moved a step closer to becoming a reality, with a first draft being released to market participants for feedback.

Next FX scandal: agency, principal or hybrid?
February 2016

A lack of clarity around the definitions of principal and agency trading, and the evolution of the grey area of the hybrid could give rise to further foreign-exchange scandals if the issue is unresolved. Markets and regulators are pro-actively putting these FX trading practices under the microscope.

BoE revamps FX Joint Standing Committee membership
February 2016
The Bank of England (BoE) has recast the terms of reference and membership of a key foreign-exchange industry committee to take account of the growing diversity of the forex market in the UK and the central role that will be played by the new global code of conduct.

Barclays' FX fine: The death knell for last look?
November 2015
The $150 million fine imposed on Barclays this week for abusing its last-look policy on clients' currency orders until as recently as three months ago signals another nail in the coffin for the controversial practice, say analysts.

FX mis-selling: Travel companies take aim at banks
June 2015
Lawyers and hedging consultants are reporting a rise in mis-selling accusations from companies in the travel and leisure sector, over complex currency derivatives sold to them by their banks and brokers. These cases are in their infancy, but are predicted to rise as the mis-selling scandal broadens from interest-rate hedging products to forex products.

Banks speed up FX reform
June 2015
Banks are making steady progress in cleaning up their foreign-exchange businesses in the wake of regulatory investigations into rigging currency markets, according to the chair of the Financial Stability Board’s (FSB) FX benchmarks group Guy Debelle.

Foreign exchange: a can of worms
May 2015
Any hopes the $5.7 billion settlement between the leading FX banks and US authorities will finally put the FX fixing scandal to bed are likely to prove misplaced.

BIS moves to end confusion over conflicting FX codes of conduct
May 2015
The Bank for International Settlements (BIS) has formed a new FX working group to settle the problem of conflicting codes of conduct for FX market practitioners, promising to draw the best from all six existing codes to create a single document that will be universally applicable.

Mis-selling: FX hedges in the spotlight
April 2015
Mis-selling cases of foreign-exchange hedging products are on the rise with claimants inspired by the success of interest-rate swap mis-selling claims. Moreover, sharp volatility in currency markets has hit some businesses' hedges hard, leading them to question the suitability of FX products sold to them by their banks.

FX: Lessons from the fix
December 2014
It’s time to get some perspective back into the debate about global foreign exchange.

Fix fines fuel technology gold rush
November 2014
Technology companies are gearing up for a potential gold rush around FX benchmark trading, amid expectations the multi-billion dollar fines imposed on banks last week will accelerate appetite for solutions to boost transparency, oversight and pricing, analysts say.

$4.2 billion FX fines are just the beginning
November 2014
Investment banks are keen to close the chapter on the foreign-exchange rate-rigging scandal after Wednesday’s announcement of regulatory fines totalling $4.2 billion, but more banks are expected to be fined and industry participants believe other nefarious practices should now be thoroughly investigated.

Regulators seek to restore FX’s broken trust covenant
September 2014

The debate around how to strengthen the regulation of FX markets continues to rage. Advocates highlight examples of regulations that have benefited the markets in the long run, while detractors warn of unintended consequences and cite their own examples of risk-mitigating measures evolving naturally within the industry.

Peer-to-peer FX catches on
August 2014
The foreign-exchange benchmark scandal looks set to be a boon for burgeoning peer-to-peer (P2P) currency-exchange platforms, as they capitalize on the demand for transparent and innovative solutions.

July 2014
Global regulator the Financial Stability Board (FSB) has published its proposals on how to restore the integrity of foreign-exchange rate benchmarks in the wake of alleged market malpractice, but market participants argue these simply mask deeper structural problems in the industry.

FX players reveal favoured regulatory fix
July 2014
As the FX regulatory landscape gets revamped, data from the Euromoney FX Survey 2014 shed light on what the market wants when it comes to benchmark reform, including its views on sticking with the current WM Company and Thomson Reuters fix.

Reuters remains market choice for FX benchmark
July 2014
As Thomson Reuters announces a revision to foreign-exchange trading rules, data from the Euromoney FX Survey 2014 reveal the majority of respondents want to see the joint WM Company and Thomson Reuters fix remain as the benchmark.

Fall of self-regulated spot FX
June 2014
Government plans to crack down on the UK’s foreign-exchange market amid reports of mass manipulation could see the demise of the London FX fix. Suggested reforms range from a transparent auction-based pricing system to banning the practice of last look.

Banks' FX cash cow runs out of milk
June 2014
Market rigging lawsuits, trader suspensions and a move to swap execution facility trading are hurting banks’ ability to make money in foreign exchange, warn analysts.

FX survey 2014: The reign of terror
May 2014
Investigations into allegations of market fixing in foreign exchange are spreading into the very heart of the business. Those running the world’s biggest FX houses live in fear of what analysis of hundreds of millions of calls and emails will unearth. Do investigators and regulators risk bringing down the axe on a market that has always provided unrivalled liquidity and ultra-tight pricing for clients?

FX probe digs the dirt to clean up market structure
May 2014
A high-profile investigation into market manipulation has heralded increased scrutiny of FX trading practices and could see major changes to the way the industry operates. But scratch below the surface and the tide may be turning towards a healthier market structure.

FX probes spread to traders' personal accounts
May 2014
Rumours have been circulating in the foreign exchange markets for some weeks that investigations – both internal by banks and external by regulators – will extend to bankers' use of personal accounts (PA).

FX investors opt for technology fix to FX benchmark probe
May 2014
The regulatory probe into allegations that traders have colluded to manipulate the $5.3-trillion-a-day foreign exchange market has some way to run, but some investors are pre-empting the results with technologies they say will help them reduce their reliance on industry benchmarks.

FX fixing controversy is so 2006: what they said back then
March 2014
Dismayed by the media coverage of the FX fixing controversy as the new Li[e]bor, which suggests the fixing practice of FX dealers, exposed to principal risk for large orders, constitutes an open-and-shut case of outright manipulation and is a new controversy? Well, continue reading.

FX dealers discussed technical fix issues not market rigging, says BoE
March 2014
Markets director Paul Fisher clarifies discussions that took place over trading around fixings at meetings of the Bank of England FX committee subgroup, but acknowledges severity of market-rigging allegations.

FX probe sparks shift in social trading
February 2014
Amid litigation fears and calls for greater communication transparency, financial institutions have imposed heavy restrictions on traders’ electronic communications. However, social trading is here to stay and new platforms, such as Saxo Bank’s portal, are capitalizing on the gap in the market.

FX benchmark probe highlights flaws in voluntary best practices
February 2014
As the Bank of England conducts a review into what its officials knew of FX benchmark manipulation, observers call for more robust adherence to trading best practices.

Banks make belated compliance push to combat market abuses
February 2014
As more financial scandals continue to emerge, regulators and banks are hoping technology and new internal controls will allow them to get to grips with the rogues. Trading floors might never be the same again.

FX industry reels from regulatory earthquake
January 2014
Foreign-exchange market tremors are likely to reverberate for years to come as the global probe deepens, triggering fears of regulatory overkill.

Banks’ 2013 fall in FX revenues might be repeated this year as risks coalesce
January 2014
Top banks face greater risks in 2014 from shaky economic outlooks, indiscriminate reputational damage from market scandals, strict collateral rules, increased competition from ECNs and historically low market volatility.

Forex probe: how to fix the fix

November 2013
As the investigation into the alleged manipulation of FX widens, the jury is out on whether the practice is tantamount to front-running clients or simply a case of hedging. Suggested reforms to the benchmark include handing it over to a public body, or banks’ abandoning fixing-related orders altogether and treating the flow as normal business, while others think regulators’ efforts would be better spent reforming the fix in options contracts.

Fix investigation switches focus to real-money clients
November 2013
Asset managers are traditionally the biggest users of the foreign exchange daily fix. As Euromoney Market Data shows, the top banks in this area are not quite the same as the leading trading houses for overall market share.

Foreign exchange: Fix scandal might herald the end of voice broking
November 2013
Voice traders are already being sidelined by the big banks as the investigation into fixing the fix gathers steam. How far-reaching will the fallout from the fix scandal be?

Spot trading ethics questioned in WMR probe
October 2013
The global regulatory investigation into possible manipulation by foreign exchange dealers of the WM/Reuters (WMR) 4pm London fix benchmark could be ignoring the structure of currency markets and the way spot desks routinely execute large client transactions, three London-based currency managers tell Euromoney on condition of anonymity.

FX fixing is no Libor scandal – yet
June 2013
News that UK regulators are investigating alleged manipulation in FX benchmarks has hit the headlines, but can it be compared to the Libor scandal?