The penalties imposed by the Financial Conduct Authority (FCA) on five banks for rigging the £3.5tn-a-day foreign exchange markets represent the first time the regulator has tried to synchronise the outcome of such a large-scale investigation.
The fines imposed on each bank surpass the previous record penalty handed out by the FCA, the £160m ($254m) that UBS had to pay in 2012 for rigging Libor.
In the UK, UBS was fined £233m, with £225m for Citibank, JPMorgan at £222m, RBS at £217m, and £216m for HSBC. Barclays has yet to settle. In the US, the regulator fined Citibank and JP Morgan $310m each, with $290m each for RBS and UBS, and $275m for HSBC.
Bank of America Merrill Lynch has admitted it is also facing a fine.
The US regulators have imposed a string of fines and penalties on banks since the onset of the banking crisis – some of which date back to the sale of mortgage bonds linked to the subprime debt crisis in 2007.
The largest is the near-$17bn settlement with Bank of America in August 2014 in relation to the sale of bonds before the crisis. “This historic resolution – the largest such settlement on record – goes far beyond ‘the cost of doing business’,” said attorney general Eric Holder at the time.
In 2013, JP Morgan Chase agreed a $13bn settlement over the sale of bonds to the public in the runup to the banking crisis. “No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability,” Holder said at the time.
In June 2014, French bank BNP Paribas reached a near $9bn settlement for breaching US sanctions against Iran, Cuba and Sudan.
Until now, the largest fines by the FCA, and its predecessor body the Financial Services Authority, have been imposed for rigging Libor. They were: £160m for UBS in December 2012; £105m for the Netherlands’ Rabobank in October 2013; £105m for Lloyds Banking Group in July 2012; and £87.5m for RBS in February 2013.
