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Swiss Forex probe launched

March 31, 2014

Swiss anti-trust regulators are formally investigating eight global banks for allegedly manipulating foreign currency exchange rates. The banks’ currency traders are suspected of colluding to rig the rates.

USA Schuldenkrise Dollar Flagge Fahne Finanzkrise Symbolbild
Image: picture alliance/dpa

Following preliminary investigations in September, official probes for currency manipulation had been launched against eight banks based in Switzerland, Great Britain and the United States, #link:https://www.news.admin.ch/message/index.html?lang=en&msg-id=43321:Swiss competition watchdog WEKO announced Monday#.

The banks under investigation were Swiss lenders UBS, Credit Suisse, Julius Bär and Zürcher Kantonalbank (ZKB), as well as British banks Barclays, Royal Bank of Scotland (RBS), and JPMorgan and Citigroup from the United States, WEKO said.

“Evidence exists that these banks colluded to manipulate exchange rates in foreign currency trades,” WEKO added in a statement.

WEKO also said it assumed that most important exchange rates were affected, as currency traders from those banks were suspected of exchanging sensitive information as well as coordinating their buying and selling to this purpose.

Swiss authorities are the first to launch a formal investigation into foreign exchange rate (Forex) rigging, with regulators in Britain, Hong Kong and the United States still examining evidence of manipulations in the 5.3-trillion-dollar-a day Forex market.

“We have to conduct the investigation ourselves. There is no legal basis at the moment to exchange data directly with foreign authorities, “ WEKO Director Rafael Corazza said, admitting, however, that he was in touch with regulators in other countries.

In a statement on Monday, Credit Suisse said it was astonished by the allegations, especially since it had not been part of the preliminary investigation.

ZKB noted that it only played a very minor role in Forex trade, but emphasized it would fully cooperate with the authorities.

Switzerland's biggest bank, UBS, refused to comment on the investigation. Last week, however, UBS suspended several currency traders, pending investigations into market rigging.

WEKO said that the investigation would take months to complete and could result in fines of up to 10 percent of the revenue generated by the banks from Forex trade in Switzerland over the past three years.

uhe/tj (AFP, Reuters, dpa)