Two months after the Fed fined Deutsche Bank a paltry $157 million for manipulating currency markets after the German bank’s traders were found to be using “chat rooms” to rig FX trading, we learn that there was more gambling going on here, and on Monday the Fed announced that it will fine French BNP Paribas $246 million “for the firm’s unsafe and unsound practices in the foreign exchange (FX) markets.”
According to the press release, the Board levied the fine “after finding deficiencies in BNP Paribas’s oversight of, and internal controls over, FX traders who buy and sell U. S. dollars and foreign currencies for the firm’s own accounts and for customers.” And, not surprisingly we once again find that FX rigging was confined chat rooms:
“The firm failed to detect and address that its traders used electronic chatrooms to communicate with competitors about their trading positions. The Board’s order requires BNP Paribas to improve its senior management oversight and controls relating to the firm’s FX trading.”
Perhaps one day the Fed will realize that as long as its keep settling for paltry amounts that are a fraction of how much the banks make by violating the rules (and yes, participating in chat rooms), this type of behavior will never end. That day won’t be today.
In its complaint, the Fed notes that during the Review Period:
This post was published at Zero Hedge on Jul 17, 2017.