1st Nov 2013 10:10
LONDON (Alliance News) - As the regulatory probe into the global foreign exchange market picked up pace, Royal Bank of Scotland Group PLC Chief Executive Ross McEwan adopted a tough tone Friday in discussing his own company's approach to possible wrongdoers.
"Investigations are at an early stage, but I want to be clear that we will come down very severely on anyone who is found to break those rules. There is no place for that at RBS," McEwan told journalists in a call regarding the bank's third quarter results.
RBS, which is set to form an internal bad bank to manage its non-performing loans, has been contacted by regulatory authorities, including the Financial Conduct Authority in the UK, investigating possible manipulation of foreign exchange rates by multiple financial institutions.
Swiss regulator FINMA and the Department of Justice and Commodity Futures Trading Commission in the US also have launched investigations.
"The group is reviewing communications and procedures relating to certain currency exchange benchmark rates as well as foreign exchange trading activity and is cooperating with these investigations," RBS said in its third quarter statement.
RBS has suspended two traders in its foreign exchange division, according to Friday's edition of the Financial Times, which cited two people familiar with the situation, though McEwan declined to comment on "individuals" involved.
RBS also said it has submitted a remediation plan to the Monetary Authority of Singapore following RBS's announcement in June that the bank was one of 20 "to have deficiencies in the governance, risk management, internal controls and surveillance systems relating to benchmark submissions following a finding by the MAS that certain traders made inappropriate attempts to influence benchmarks in the period 2007 - 2011".
RBS is the latest bank to acknowledge regulators' investigation into the USD5.3 trillion per day foreign exchange market, after Barclays PLC, Deutsche Bank AG and UBS AG earlier this week said they were cooperating with a range of regulators and authorities on the matter.
On Wednesday, Barclays said it is reviewing its foreign exchange trading covering a several year period through August 2013 and is cooperating with the relevant authorities in their investigations.
The investigations appear to be in their infancy, with no banks yet ready to estimate the outcome or financial impact, if any, of the regulators' probe.
The investigation is part of ongoing scrutiny of benchmarks used to price financial products, after the Libor-rigging scandal and accusations of manipulation of gas prices.
RBS shares were down 3.8% at 353.58 pence Friday morning. Barclays shares were off 2.2% at 257.75 pence.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
BarclaysRBS.L