Barclays joins banks paying fines over forex-rigging scandal

Barclays, RBS, JP Morgan and Citigroup are all expected to settle forex manipulation accusations with US regulators as soon as this week.

 

Shares in the sector have been held down by uncertainty around the scale of the fines, which are expected to come in at around the £3bn mark.

 

It comes six months after a group of six banks settled with Britain’s Financial Conduct Authority (FCA), the US’ Commodity Futures Trading Commission (CFTC) and Swiss regulator Finma.

 

In November last year JP Morgan, HSBC, UBS, Citi, Bank of America and RBS paid a total of £2.6bn to the watchdogs.

 

This time the US’ Department of Justice will be taking the funds, but Barclays is also expected to reach its settlement with the FCA and CFTC at the same time.

 

The British high street bank declined to join the previous agreement in November, having been burned by the Libor scandal when it elected to settle first with regulators, exposing the lender to the brunt of the political fallout.

 

Instead, it wants to get all of the forex fines out of the way in one go, alongside other banks, to avoid such devastating exposure.

 

However, because Barclays held back with previous fines it will not get the 30 per cent discount offered by the FCA to the lenders in November for settling early.

 

The bank set aside an extra £800m in the first quarter to cover the anticipated costs of the investigation.

 

After a rough three years since the Libor scandal broke, Barclays hopes this settlement could draw something of a line under its conduct issues.

 

It is getting closer to the end of its payment protection insurance compensation redress payouts, and hopes that its investment banking reforms are starting to take effect.

 

Barclays’ share price rose by 3.7 per cent on Friday.

 

All banks involved declined to  comment.