Banks not doing enough to overhaul forex business, says watchdog

Banks are not doing enough to reform in the wake of the foreign-exchange rigging scandal, a global regulator has said, warning that more regulation may be needed to force through improvements.

Guy Debelle, a member of the task force set up by the Financial Stability Board to look into how forex benchmarks can be made less vulnerable to manipulation, said banks have not fully overhauled their forex teams to prevent inappropriate information sharing while their clients are balking at having to pay for services that were once free.

Inappropriate sharing of confidential information with traders from other companies was one of the main issues highlighted by the scandal, which has seen six banks pay a total of $4.3bn in fines so far.

“The group recommended that banks and other FX dealers separate their fixing business from their regular business . . . Adoption has been somewhat mixed,” Mr Debelle, who is also assistant governor of the Reserve Bank of Australia, said in a speech in Sydney on Thursday.

“If these recommendations are not implemented, then the likelihood of a regulatory response will increase.”

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