EU Reviews FX Manipulation That Raises Libor-Like ConcernsGaspard Sebag
The European Union is looking at possible manipulation of currency rates after “concerns” similar to those in the Libor and Euribor lending-rate probes were brought to the attention of regulators.
Joaquin Almunia, the EU’s antitrust chief, discussed a possible investigation of currency rates during a speech in London today, after saying last month that inquiries were at a “very, very preliminary phase.”
“Revelations of irresponsible and possibly illegal practices keep emerging in the press,” Almunia said. “Similar benchmark-manipulation concerns” to those examined in the EU’s London interbank offered rate and Euribor investigations “are raised in a case that has just been brought to our attention in the foreign exchange market.”
The EU’s probe comes after Swiss regulators said last month that they’re investigating several banks for allegedly colluding to manipulate the $5.3 trillion-a-day foreign exchange market. Bloomberg News reported in June that dealers at banks pooled information through instant messages and used client orders to move benchmark currency rates. Britain’s Financial Conduct Authority has also said it was reviewing the allegations.
Almunia’s speech comes as the European Commission prepares to hand out fines as soon as next month to banks that have reached settlements in the Euribor probe. Credit Agricole SA said last week that it rejected a deal with the EU. HSBC Holdings Plc also dropped out of talks to settle the probe, according to a person familiar with the investigation.