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How to Stop the Rate-Riggers

The currency exchange rate scandal offers concrete clues
Martin Wheatley, chief executive of the U.K.’s Financial Conduct Authority
Martin Wheatley, chief executive of the U.K.’s Financial Conduct AuthorityPhotograph by Matthew Lloyd/Bloomberg

Regulators in the U.K., the U.S., and Switzerland have moved with impressive speed to extract about $4.3 billion from some of the world’s largest banks for their role in rigging global currency markets. Now comes the hard part: identifying and punishing the people who actually did it and stopping it from happening again.

The settlements with six banks—UBS, Citigroup, JPMorgan Chase, Bank of America, Royal Bank of Scotland, and HSBC Holdings—paint a depressingly familiar picture. Foreign exchange traders profited at their clients’ expense by abusing information about orders, and they conspired to influence London-based benchmarks that affect decisions and transactions worldwide. The transgressions went on from 2008 through late 2013, persisting even as some of the same banks were reaching settlements over the rigging of the London interbank offered rate, or Libor.