£2bn in fines for the banks!
Regulators from the US, UK and Switzerland have doled out $3.4bn worth of fines on five banks including Royal Bank of Scotland in the first of the smackdowns that are coming about after a global probe into rate-rigging in the foreign exchange markets.
HSBC, RBS, Swiss bank UBS and American banks JP Morgan Chase and Citibank have all been fined... and the probe into Barclays in ongoing.
The Financial Conduct Authority (FCA) boss Martin Wheatley said there's more to come: "This isn't the end of the story. The individuals themselves will face the consequences."
"At the heart of today's action is our finding that the failings at these banks undermine confidence in the UK financial system and put its integrity at risk." the FCA added as a whole.
The American regulator, the Commodity Futures Trading Commission (CFTC), were cracking their knuckles too. Boss Aitan Goelman said: "The setting of a benchmark rate is not simply another opportunity for banks to earn a profit. Countless individuals and companies around the world rely on these rates to settle financial contracts."
The combined regulators found that hoodwinkery had been going on for some years and that certain foreign exchange traders at the banks had teamed up and coordinated tradings with each another in a bid to manipulate foreign exchange rates.
Groups that were up to no good called themselves, irritatingly, 'the players', 'the A-team', 'the 3 musketeers' and '1 team 1 dream', according to FCA documents. They should've been fined for those names alone. Using chatrooms and slang, they were found to have attempted to use clients' stop loss orders for their own gain as well.
The FCA said the banks had not "exercised adequate and effective control" over their forex trading businesses, and that training was "insufficient" and that the "right values and cultures" were being ignored.
RBS have six people going through the disciplinary process and suspended three while HSBC said that it "does not tolerate improper conduct and will take whatever action is appropriate". George Osborne said that this "tough action" is just what is needed to "clean up corruption in the City by a few."
As well as all this, the Serious Fraud Office is in the middle of their proceedings and preparing potential criminal charges. Big talk. Hands up if you think this is going to change the attitudes of any of the banks.