Banks Set Aside Billions of Pounds for Forex-Rigging Fines

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If future preparations can serve as any indication of former crimes, Barclays recent fund allocations may provide enough proof for skeptics who have been convinced “from the beginning” that UK’s banks, as well as those in other countries around the world, have been engaging in illegal activities within the Forex markets. Currently, Barclays has allocated nearly £500m in order to ensure that any costs or fines incurred in the ongoing investigation regarding forex riggings are fully covered.

Barclays is no stranger to controversy. In 2012, the bank was fined approximately £290m for manipulating Libor, a scandal that pales in comparison to the penalties which may be sustained in upcoming months. Currently, the Financial Conduct Authority is attempting to reach a settlement with six major banking establishments regarding illegal activities in the Forex marketplace, a trading arena that involves over £3.5tn in transactions each and every day.

It is expected that the Financial Conduct Authority will release information regarding their regulatory actions next month. Experts agree that it is quite likely that the FCA will include an exhaustive collection of e-mails and e-chats, all of which point strongly to interest-rate fixing in forex markets among traders with Barclays.

Unfortunately, Barclays continues to soil its reputation with scandals such as this. Shares in Barclays continue to fall as an ever-increasing series of controversies continue to mount. In the third quarter of this year, Barclays’ profits have fallen by nearly £200m when compared to a year ago this time. Almost 8,000 jobs have also disappeared over the course of the last year. That being said, over the course of the past nine months, overall profits for Barclays have risen by approximately 5%.

Although Barclays is currently suffering heavily from some of the costliest scandals the bank has ever experienced, bank leaders have already stated that the bank will continue to pay its 1p quarterly dividend as promised. Whether or not the bank will be able to salvage its reputation after these issues, however, is another matter entirely. More information about this scandal will be available in the following weeks, following pending announcements from the Financial Conduct Authority and Barclays’ leadership.

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Isuru Karavita

He graduated from the university of Hertfordshire with a BEng(Hons) in Digital Communication and Electronic Engineering. 

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