This is a Reuters news-story on how five major banks would plead guilty to charges of rigging Foreign Exchange Markets.
LONDON/NEW YORK (Reuters) – Five of the world’s biggest banks are expected to be hit with a combined bill of more than $5 billion and criminal charges on Wednesday in a settlement with U.S. and British authorities over rigging of currency markets.
It will mark another dark day for an industry trying to put past sins behind it and brings the total in penalties some big banks will pay for their traders allegedly manipulating the $5-trillion-a-day foreign exchange market to about $10 billion.
U.S. banks JPMorgan and Citigroup and Britain’s Barclays and Royal Bank of Scotland are expected to plead guilty to criminal charges with the U.S. Department of Justice related to forex manipulation, people familiar with the matter said.
It would be unprecedented for the parent companies or main banking arms of so many major banks to plead guilty to criminal charges in a coordinated action. JPMorgan and Citigroup would be the first major U.S. banks to plead guilty to criminal charges in decades.
Swiss bank UBS is expected to avoid a criminal charge after getting immunity for alerting authorities to a possible problem. But it faces a criminal charge over the rigging of benchmark (Libor) interest rates, two people familiar with the matter said.
What does pleading guilty mean?
The banks are seeking assurances from U.S. regulators they will not be barred from certain businesses if they plead guilty, several sources familiar with situation said.
Or, have the banks started behaving better? Well, this news-story says NO (ht: Praveen Chakravarty). Unless compensation is tackled, these issues won’t go away. Compensation is closely linked to banks’ ability to create money. That is a separate topic.