The new fines are a second wave of punishments for rigging forex markets. In November 2014, six banks, including HSBC, Royal Bank of Scotland (RBS), UBS, Citibank and JP Morgan, were fined 2.6bn, taking the total penalties to 6.3bn.Four of the banks now being fined JP Morgan, Barclays, Citigroup and RBS have agreed to plead guilty to US criminal charges. Citigroup’s behaviour was “an embarrassment,” according to CEO Mike Corbat. He explained that an internal investigation was underway and that nine people had been fired. The bank was fined 770m, while JP Morgan, which had paid fines of over 26bn since 2009, was fined another 572m. JP Morgan CEO Jamie Dimon said: The conduct described in the governments pleadings is a great disappointment to us. We demand and expect better of our people. The lesson here is that the conduct of a small group of employees, or of even a single employee, can reflect badly on all of us, and have significant ramifications for the entire firm.
RBS, a repeat offender, is being fined 430m on top of its 2014 sum of 400m and has dismissed three members of staff and suspended two. CEO Ross McEwan suggested that pleading guilty for such wrongdoing is another “stark reminder of how badly this bank lost its way and how important it is for us to regain trust”. However, RBS has been warned that it could face further action as it is 79 per cent owned by taxpayers. According to analysts, Barclays was fined the most as it did not join the other banks in November to settle investigations by UK, US and Swiss regulators. The bank will be handing 284.4m over to the FCA as part of its 1.5bn settlement, heralded as the biggest UK fine in history. Read more about banks:
- OakNorth Bank gains license and aims its proposition firmly at SME lending
- Charlie Mullins: Use bank fines for apprenticeships, startup loans, mentoring and training
- Metro Bank and Zopa aim to further disrupt British banks with new partnership
Chris Leslie MP, Labours shadow chancellor, has suggested that there needs to be “fundamental reform” and tougher penalties for banking misconduct, given that strategies range back as far as 2013. If ever there was an example of appalling collusion between bankers putting their own interests ahead of customers, then this is it,” he said. “We need to rebuild the reputation of British banking, which plays such a crucial role in our economy. Since the announcement, Barclays’ stock market value increased to 1.5bn as shares rose by 3.4 per cent, while RBS shares rose 1.8 per cent. The increases came even though the regulators said there could be more fines to come.
UBS salesmen used elaborate internal system, involving hand signals and “hoots,” to trick their customers. pic.twitter.com/2OL8uxMlTs” David Enrich (@davidenrich) May 20, 2015
Mark Taylor, dean of Warwick Business School, argued that the UK must embrace a cultural shift to avoid Lynch’s warning. He said: “Our pension funds invest billions of pounds in the financial markets and if they are being cheated in this way it affects every one of us.” He noted that we could be seeing a few senior executive resignations in the future. By Shan Schutte
Shares in Barclays and UBS +3%, RBS +2% today. Markets clearly rattled and chastened by the FX rigging fines pic.twitter.com/pX2V0pKtey” Jamie McGeever (@ReutersJamie) May 20, 2015
Share this story