London - Banks are “struggling” to stamp out alleged collusion in the foreign exchange market, the chairman of Britain's Financial Conduct Authority (FCA) watchdog told a parliamentary committee on Tuesday.
The FCA and US regulators are investigating allegations that dealers at major banks colluded and manipulated key reference rates in the $5.3 trillion (R58 trillion) a day foreign currency market, the world's biggest and least regulated.
“I think all the banks are really struggling as to how they stamp out that alleged activity,” Wheatley said.
“I know all of them are deeply embarrassed by what's happened and want to see that change. I know that they have put in place remedial action.”
At the centre of the investigation is activity around the 4 pm currency fix in London, a 60-second window where key exchange rates are set.
These prices are used as reference rates for trillions of dollars of investments and trades globally.
“It's very unfortunate that we've had what appears to be abuse in a number of sectors in the market follow on from the Libor fines,” Wheatley said, referring to the scandal over rigging interest rates such as the London interbank rate - also the basis for a huge number of deals globally. - Reuters