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Banks (Finance)

Bank of England's Investigation into Forex Manipulation Draws Scrutiny from US Department of Justice

Strategic Insights

— 1 min read

The Bank of England's investigation into potential forex manipulation, led by barrister Lord Grabiner, has come under fire for its thoroughness. The US Department of Justice, which is investigating numerous banks for their role in the scandal, has requested to interview a senior Royal Bank of Scotland employee, James Pearson, as part of its investigation. This move is unusual as Pearson is not currently under investigation by US authorities. The DOJ's interest in the Bank of England's report is a significant development, given its attempt to secure guilty pleas from several banks, including RBS and Barclays, for their involvement in forex manipulation.

Key Takeaways:

  • The US Department of Justice has requested to interview James Pearson, the head of European FX trading at Royal Bank of Scotland, as part of its investigation into forex manipulation.
  • The DOJ is concerned about the thoroughness of the Bank of England's investigation, led by barrister Lord Grabiner, which found no wrongdoing by Bank officials.
  • The investigation has criticized former Bank of England currency chief Martin Mallett for not escalating concerns about potential misconduct, although he was not aware of actual market rigging.
  • The Grabiner report cost $4.4 million (including a $540,000 fee for Lord Grabiner) and was criticized by MPs on the Treasury select committee.
  • The DOJ is expected to fine several banks, including RBS, Barclays, UBS, JPMorgan, and Citigroup, billions of dollars next week for their role in forex manipulation.
  • Barclays, which missed out on a settlement in November, will also be fined by the UK's Financial Conduct Authority.

Statistics:

  • The Grabiner report cost $4.4 million (approximately £3.5 million), including a fee of $540,000 (approximately £400,000) for Lord Grabiner.
  • The DOJ is expected to fine several banks billions of dollars next week.
  • Six banks were fined over £1 billion by the Financial Conduct Authority in November.
  • The Bank of England's investigation was led by barrister Lord Grabiner.
  • The report criticized Martin Mallett, former Bank of England currency chief, for not escalating concerns about potential misconduct.

Sources:

  • The Financial Times
  • The Bank of England
  • The US Department of Justice
  • The Treasury Select Committee
  • The Financial Conduct Authority
  • The Royal Bank of Scotland

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