Commerce Commission investigates currency trading amid global probe into manipulation
By Paul McBeth
March 31 (BusinessDesk) - The Commerce Commission has an investigation underway into the foreign exchange market, amid a
global probe into alleged manipulation of currency rates.
The New Zealand regulator’s active investigation into the currency trading market comes as at least a dozen authorities
in North America, Asia and Europe conduct inquiries into claims traders colluded with their counterparts at rival banks
to set foreign exchange rates by sharing client information.
The Commerce Commission has an “investigation in that space,” a spokeswoman told BusinessDesk. She declined to comment
on the scope of the probe or any of the parties involved.
The New Zealand dollar was the world’s 10th most traded currency with US$105 billion in average daily turnover in April
2013 and accounting for about 2 percent of the global US$5 trillion traded daily, according to the Bank for
International Settlement. The bulk of trading in the kiwi occurs outside New Zealand.
The Australian Securities and Investment Commission joined the worldwide probe earlier this month, telling the Financial
Times it would likely take a year to complete the investigation.
The Financial Markets Authority is aware of the international inquiries, and will “continue to monitor developments here
and abroad, and to liaise with agencies in New Zealand, Australia and further afield,” a spokesman said in an emailed
statement.
Since the allegations of global market manipulation emerged in a Bloomberg report last year, about 30 foreign exchange
traders have been suspended, put on leave, or fired, of which seven have come from Swiss bank UBS, the world’s
fourth-biggest currency trader, according to a Reuters report. Other firms reported to have suspended, put on leave, or
fired staff include Citigroup, Royal Bank of Scotland Group, and Barclays.
Earlier this month the Bank of England, the UK central bank, suspended a staff member pending an internal review into
allegations its employees were aware of the market manipulation.
The probe into foreign exchange trading comes after a similar investigation into fixing the London Interbank Offered
Rate, the borrowing rate between lenders known as the Libor. That probe resulted in financial institutions paying some
US$6 billion to settle civil and criminal claims.
(BusinessDesk)