The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

FX: State of California cries foul

This story was first published on theweeklyFiX, for more details please click here

The State of California is suing State Street Corporation, alleging that the Boston-based bank overcharged two of its high-profile pension funds on securities-related FX transactions. While some are claiming that the allegations involving pension funds Calpers and Calsters are the biggest story in FX for some time, the really big issue is why it has taken what are supposedly professionally run funds so long – up to eight years, according to CNBC – to realize that they might not have been filled at a realistic FX rate.

For years, asset managers have ignored the proper management of their FX exposure. They continue to do so and it is a severe abrogation of their duty to investors. To use an awful pun, transparency is a clear issue. Buying foreign assets and then leaving it up to the bank to set the FX rate as and when it wants is always going to present temptations to the sell-side institution that has done the transaction.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree