Federal regulators's suspicion on traders of some of the high-profile banks in the world had deepened further and also fueled speculation that an alliance between said traders might have bee created in their favor.
According to a report by The New York Times' The Dealbook, the foreign currency market is the least regulated in the financial world. The traders reportedly had taken full advantage by flooding the market with trades, ultimately aiding their investments while potentially increasing their clients' currency costs. Instant messages allegedly exchanged between traders also shed light to the scope of the fraud, which resulted to additional investigations on foreign banks like Royal Bank of Scotland, Citigroup and Barclays. This was revealed in the latest public disclosures of the mentioned banks and added by investigators who refused to be named. Moreover, The Post also received information from the investigators who said at least one trader had cooperated with them regarding their investigation.
United States Attorney General Eric Holder Jr said in a rare interview talking about an active investigation, "The manipulation we've seen so far may just be the tip of the iceberg. We've recognized that this is potentially an extremely consequential investigation."
Although no one had been accused of anything yet, The Post noted that investigators' currency trade investigation had been given top priority. It also indicated that the foreign currency market was especially significant across all major currencies in the world, with USD5 trillion trading on a daily basis. Moreover, The Post highlighted the fact that investment managers and pension funds rely on the currency market benchmark to determine the value of their portfolios. An independent service which is the publisher of such benchmark was also under investigation.
Norway's central bank senior researcher Dagfinn Rime said, "This is a very opaque market and it would be good to investigate and know it better."
All banks mentioned in the investigation had refused to comment about the investigation.
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