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Banks To Settle More Than €2bn In Fines Over EC Forex Probe

European CommissionThe Brussels-based European Commission, an antitrust regulator instituted by the European Union is set to discuss fines with eight of the world’s biggest banks to finally settle the four-year-old investigation regarding their alleged involvement in what was termed as a foreign exchange cartel.

The multinational banks involved in the scandal are JPMorgan Chase, Royal Bank of Scotland (RBS), Citigroup, Barclays, HSBC, UBS, and two other unnamed banks. These banks are currently in talks with the EU Commission to settle more than €2 billion in fines which was estimated to be the settlement based on earlier probes regarding the foreign exchange cartel.

The probe conducted by the EU Commission wanted to shed light into the alleged manipulation and rigging of the global forex market estimated at $5.3 trillion. These US and European banks were penalized for being involved in a cartel that manipulated forex interest rates. These rates were used as reference points for pricing more than $400 trillion worth of products and services all over the world.

In 2013, Deutsche Bank received the highest fine of €725.4 million for getting involved in benchmark interest-rate fixing. RBS, JPMorgan, Citigroup, Societe Generale, and brokerage RP Martin were also hit with penalties. In 2015, Barclays, Bank of America, Citi, JPMorgan, RBS, and UBS were fined $5.6 billion by US regulators after having tampered with forex markets from December 2007 to January 2013. The Swiss firm UBS and Britain-based Barclays were able to dodge fines amounting to nearly €3 billion collectively for being the key institutions that revealed the existence of the cartels.

According to global firm Boston Consulting Group, the named financial institutions have paid more than $320 billion in penalties since American, British, and Swiss officials started the probe in 2008. The cartel case remains one of the biggest the EU Commission has handled in its history. Investigation has been very difficult for the regulator because of the complexity of the alleged misconduct, which covers a number of currencies.

The involved financial institutions have already met with the EU Commission at the start of 2017 to review the evidence that the investigations have turned up. Over the course of the next months, these banks will be preparing to negotiate the fines levied by the EU. No new meetings are scheduled between the banks and the regulators. More information about the deals and the total fines are expected to be announced next year.

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