London - The $51.1 trillion-a-day currency market is getting a new playbook as foreign exchange traders try to change their image from naughty to nice.
In a worldwide clean-up effort, more than 40 industry participants, steered by central bankers, have hammered out the FX Global Code - 75 pages of voluntary standards aimed at rooting out misconduct in the world’s biggest financial market.
The document, released on Thursday by the major central banks, offers such advice as: Protect confidential information, don’t mislead your counterparties and be fair and transparent. The guidelines culminate a two-year effort to bolster standards and discourage bad behaviour after a rate-rigging scandal led to about $10 billion (R130.13 billion) in fines for banks and damaged trust.
“This is effectively their last chance to try and get things right,” Guy Debelle, deputy governor of the Reserve Bank of Australia, said. He led the group of central bankers working on the standards, which generated more than 10 000 comments when they were being drafted.
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The currency market received a reminder of the obstacles as recently as Wednesday, with an announcement that BNP Paribas was fined $350 million for its involvement in the foreign-exchange manipulation scandal.