There is a chance that currency traders at some major banks have been manipulating the rates of international exchange rates for 10 years. News agency Bloomberg made a report of this today based on insiders around the case in question.
Five currency traders are said to have reported this to Bloomberg news agency. According to them, the currency benchmarks are manipulated by currency platform WM/Reuters. In the 60 seconds in which the benchmarks are set, traders from several major banks would collaborate and play with the orders processed in these 60 seconds. In this way, they control the movements of international exchange rates. The UK's financial markets regulator (FCA) wants to launch an investigation into the alleged manipulation of exchange rates.
Every day, 4.7 trillion dollars (3.5 trillion euros) are traded on the foreign exchange market. It is the largest market in the financial system, but also the least regulated. Fund managers and brokerage firms use WM/Reuters rates on a daily basis to measure the value of their assets.
It is not the first time that manipulation of key financial benchmarks has been suspected. The first suspicion was the Libor scandal, in which several major banks were fined hefty for manipulating interest rates. There were also suspicions of manipulation by some large oil companies that tried to manipulate the oil price.
Last year, there have been complaints to the FCA about alleged manipulation of exchange rates. One of the largest asset managers in Europe filed this complaint. The regulators said they are aware of the alleged cases and say they will talk to relevant parties.
