Changing attitudes: Bank penalties

Global regulators have imposed penalties totalling $3.4bn on five major banks, including UBS, HSBC and Citigroup for failing to prevent their traders from attempting to manipulate foreign exchange markets.

Switzerland’s UBS was given the biggest penalty, paying $661m to Britain’s Financial Services Authority and the US Commodity Futures Trading Commission.

Regulators found evidence that traders had colluded to try and manipulate foreign exchange rates by sharing confidential information about client orders with one another. This activity occurred right up until October 2013.

It is astonishing that an internal investigation by the bank found no evidence that any of its officials had been involved in unlawful or improper behaviour. The gung-ho attitude of bankers was also revealed during the investigation by regulators in Britain. After attempts to manipulate one sterling/dollar currency rate that netted a $162,000 profit, traders congratulated one another, saying “nice work gents... I don my hat” and “Hooray! nice teamwork”.

This has a certain familiarity about it, similar to the Anglo Irish Bank tapes.

Investigators say the fines will help put the largely unregulated $5tn-a-day market on a tighter leash, with dozens of dealers suspended or fired. But, considering the attitude of bankers and traders, that remains to be seen.