BoE signals that interest rates may not rise until autumn 2015 Quarterly inflation report -- full coverage starts hereSummary: Banks fined £2bn for FX rigging 4.41pm GMT Over in Greece political tensions are rising as the opposition once again steps up calls for early elections amid mounting controversy over Troika demands. Helena Smith reports:Racheting up the pressure on a government that is feeling increasingly wobbly in power, the radical left main opposition Syriza leader, Alexis Tsipras, said the only exit for debt-stricken Greece was fresh elections.[We have] to hold elections of deliverance and change so that the people can decide which strategy Greece should follow to get out of the crisis, the politician told his parliamentary group today.Syriza has been steadfastly leading polls and would likely emerge as the first party if snap elections were held in the event that the government fails to muster enough support to replace the outgoing president in February.The leftist spoke as pressure from international creditors mounted on Greeces coalition government. Short of bringing in radical reforms actions that include re-negotiating the pension system and public sector jobs foreign lenders at the EU, ECB and IMF have said, bluntly, they will not support Athens plans to exit its bailout programme by the end of the year. The bleak view is not just confined to Greece. In Brussels, Greek MEPs representing the ruling New Democracy party, also believe the government is losing ground because of its failure to enforce reforms. The government is not implementing all the measures it has agreed to, the MEP Georgios Kyrtsos told me in the Belgian capital.Greece cannot expect to restructure its debt by 30% or 50% unless it moves faster [on reforms] and a rescheduling of the debt is absolutely necessary, said Kyrtsos, a member of the EUs Committee on Economic and Monetary Affairs. 4.21pm GMT Crude oil prices continue to slide, with Brent down more than 1% at $80.73 a barrel amid talk of a large increase in US stocks last week. Meanwhile Saudi Arabia has said it wants stable oil markets and prices, and suggestions of an oil price war was just a misunderstanding. Later this month - 27 November - comes a key Opec meeting when the oil producers have to decide whether to cut output to combat the recent plunge in prices. 3.10pm GMT My colleague Larry Elliott agrees with the last part of J.P. Morgans assessment and says a rate rise is unlikely to come before next years election. He writes:The economy is humming along. Growth will be strong this year and next. Wages have started to rise more rapidly than prices. Interest rates have been at 0.5% for more than five years. So when is the first increase in borrowing costs coming?Not yet. That was the clear message from the governor of the Bank of England, Mark Carney, as he opened his Inflation Report press conference with a nod to Karl Marx. A spectre is now haunting Europe, the governor said. The spectre of economic stagnation. 3.00pm GMT Despite todays dovish comments on interest rates from the Bank of England, the timing of the next rise is still uncertain, said Kerry Craig, global market strategist at J.P. Morgan Asset Management:Markets interpreted the tone of todays report and associated press conference as dovish given weaker inflation forecasts and Mark Carneys downbeat view of the global economy outside of the US.This release broadly confirmed markets expectations that interest rates could be on hold until October 2015 but its worth remembering how much the expected timetable for rates has changed in the past six months. At the Mansion House speech back in June, Mark Carney warned markets that rates might well rise faster than what was then expected which was interpreted by many as suggesting a rate rise before the end of 2014. Since then weaker global growth outlook and sharp fall in global inflationary pressures have pushed the expected date of the first rate rise by nearly 12 months. We have also seen a similar shift in the US. 2.53pm GMT Jean-Claude Juncker, the head of the EU executive, has said he would lead a European campaign against tax avoidance and evasion, after dominating Luxembourg politics for 20 years during which the Grand Duchy got rich on the most systematic tax avoidance practices known in Europe, writes Ian Traynor.Less than a fortnight into his five-year term as the new president of the European commission, Juncker broke his silence on last weeks revelations in The Guardian and other newspapers showing how the Luxembourg tax authorities exploited complex loopholes to enable multinationals to minimise their tax exposure, depriving other EU countries of tens of billions in revenue.Juncker said he had just ordered the drafting of a new EU directive on automatic exchange of information on national tax rulings between member states, and argued he had supported tax harmonisation in the EU since 1991. 2.39pm GMT The European Central Bank is committed to taking further unconvential measures to boost the struggling eurozone economy, the banks president Mario Draghi has reiterated.There had been talk that some ECB members were unhappy with Draghis style and would, like the Germans, resist what would effectively be full blown quantitative easing. But after last weeks ECB meeting, Draghi brushed aside such speculation, and speaking in Rome he ran through what the bank has already done - cutting interest rates, activating 1tn of credit lines for the banking system, the now famous outright monetary transaction programme, the three measures of unconventionalo monetary policy including purchasing covered bonds - before adding: All these policy actions, accompanied by the expected maintenance of interest rates at their current level for a long period of time and an ongoing expansion of the ECBs balance sheet, together with the commitment by the Governing Council to take further unconventional policy actions should medium-term inflation expectations worsen or if the measures already decided on prove to be insufficient, has led to an unprecedented degree of monetary accommodation. Today, all the current and expected market interest rates over all horizons are lower than they have ever been, and lower than they are today in the United States.A fiscal policy which, in compliance with the existing rules, may see more investment and lower taxes, together with an accommodative monetary policy are not enough to generate a revival of strong and sustainable growth without the necessary structural reforms in product and labour markets.Increased competition, the completion of Europes single market, measures which would allow unemployed workers to quickly find a new job, thus reducing the period of unemployment, measures which would raise the level of specialisation and adapt it to the demand have long been on the economic policy agenda of many euro area countries: may the thought now make way for action. 2.11pm GMT The FX scandal underlines why bankers bonuses should be subject to hefty clawbacks over many years, argues Andrew Tyrie MP, who heads up the UK parliaments Treasury Committee.This settlement also makes the strongest possible case that market participants, who are in a position seriously to harm their firm, customers or markets, should be required to defer some remuneration for long periods. It is essential to ensure that such market participants are put on contracts that leave skin in the game, some of it for long periods.With or without an FCA regulatory intervention, they need to know that their firms may withdraw deferred remuneration when they identify involvement in misconduct or failure to report it. This was a central proposal of the Parliamentary Commission on Banking Standards. Regulators should not be swayed by complaints from banks about long deferral.The settlement is part of a much needed clean-up operation, which includes the Fair and Effective Markets Review. The Treasury Committee will start to take evidence on this during a session with Dr Shafik, Deputy Governor of the Bank of England, on the Fair and Effective Markets Review next week. 1.33pm GMT If youre trying to get up to speed on the currency rate-fixing scandal, check out our round-up of the transcripts between FX-rigging traders. 1.25pm GMT Over in America, traders are waking up to the news that JPMorgan and Citigroup have been fined for allowing their traders to manipulate the forex market.And the revelation that some traders tried to profit by triggering their own clients stop loss contracts has send shivers through Wall Street [I covered this earlier in the blog]Wow, this is serious! @nanexllc: FCA said JPM engaged in triggering client stop orders in FOREX. pic.twitter.com/e5GozbWkJj 1.08pm GMT Were running a poll, asking whether our readers think fining banks actually forces them to act better: 1.03pm GMT Back on the foreign exchange rigging scandal....and some lawyers are asking whether the whole affair has been wrapped up too quickly.Brian Spiro, a defence lawyer at BCL Burton Copeland, suggests that the Financial Conduct Authority may have acted too speedily. He points out that the FCA relied on information gathered by the banks and their lawyers for some of its findings.If they can sub it out, get a speedy result and bring money into the coffers, its tempting to ask what more could you want?. But some, myself included, ask: where does due process enter the equation? Do the enforcement agencies now operate within an environment solely governed by budget and pragmatism?Before buying Osbo hype on banks read FT on how FCA allowed banks to investigate their own Forex fiddles http://t.co/syBYrO28TJ 12.50pm GMT Every time I stand outside RBS to report some major scandal I wonder if it'll be the last time and one day it will all go right. Let's hope! 12.47pm GMT Mark Carney may have reminded us that he has raised interest rates (when at the Bank of Canada), but foreign exchange traders still saw todays performance as dovish.The pound has lost nearly a cent against the US dollar today, down 0.5% to $1.583, since the BoE signalled that it might not raise interest rates until next autumn.The Bank of Englands inflation report which was released today was more dovish than expected, which lead to across the board sterling weakness. It was not drastically dovish, meaning that there was only slight weakening of the pound, but the topics of discussion were mainly on the risks presently facing the UK economy. Central to the conversation is the concern that inflation has fallen further below the target of 2% from the Monetary Policy Committee, growth concerns in the neighbouring Eurozone, the weakness of commodity prices, and a slowdown in global growth. The overall message was that forward guidance policies will continue to guide the decision of the Bank of England in regard to a next interest rate rise, and if there is an interest rate rise, it will be sustained low interest rates for a long period of time. 12.21pm GMT Is this the first time that a Bank of England governor has alluded to The Communist Manifesto?A spectre is now haunting Europe the spectre of economic stagnation, with growth disappointing again and confidence falling back. A spectre is haunting Europe the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre: Pope and Tsar, Metternich and Guizot, French Radicals and German police-spies.BoE's Carney reading Communist Manifesto?? Says "spectre is now haunting Europe the spectre of economic stagnation" http://t.co/wmT8CrLQIx 12.06pm GMT Heres a handy summary of how the Bank of Englands forecasts have changed in todays quarterly inflation report, from Rob Wood of Berenberg Bank: 11.38am GMT And finally, Mark Carney was asked whether he is offended by suggestions that hes refusing to raise interest rates low until after the next election as a favour to George Osborne.The governor doesnt appear offended, and explains that the bank sets policy to achieve the inflation target. 11.36am GMT Does Mark Carney have any sympathy with Lord Turners suggestion yesterday (in the FT) that the Bank of England should print more money to finance a larger government deficit to stimulate growth?No, the governor replies.I cant see any circumstances where I would advocate it, even in the eurozone..... Never mind the Maastricht treaty [ruling out debt monetisation] ...just as [appropriate] policy.Carney says can never contemplate buying government debt and cancelling it; he is firmly opposed to "helicopter" drops of money on all of usHelicopter money = not an option / Carney 11.24am GMT How concerned are you about the damage that the Forex scandal will have on the reputation of the City?We are concerned, Mark Carney replies. 11.18am GMT Another question on the eurozone. Observer columnist Bill Keegan has reached page 23 of the quarterly inflation report, and a warning that: Factors pushing down growth are likely to outweigh the European Central Banks efforts. 11.15am GMT Carney had his weetabix this morning! 11.14am GMT Why did the Bank of England announce the firing of its chief FX dealer today? A good day to bury bad news?No, Carney replies. We followed employment law through the disciplinary procedure -- and it wasnt related to Lord Grabiners inquiry into the FX issue. 11.12am GMT Why no mention of forward guidance, asks Skys Ed Conway. Is that because market participants see it as something of a joke?I have mentioned the word guidance, Mark Carney replies. Not my fault if you dont pay attention. Read the transcript. 11.08am GMT For those unaware of the "loon" question asked of Mark Carney the Canadian Dollar is called the loonie (believe it or not!) #BoE 11.06am GMT Very 'avian' press conference - also turning out to be quite funny. #BoE 11.06am GMT Question of the day, if not the year.Your colleague Minouche Shafik recently described herself as a wise owl, not a hawk or a dove. So what bird are you, governor? A loon, perhaps? 11.03am GMT The markets think youre being dovish today, but would you like to say anything hawkish, governor? Im still the only G7 governor who has raised interest rates, Carney smiles. Ive just not done it here. And I know how to hit an inflation target. [hes referring to Carney: "I know how to raise interest rates". I heard that as a denial of this Daily Mash 'report' - http://t.co/Zv0JDzpp6e 11.00am GMT Heres the full Inflation Report [pdf]: http://t.co/5xgumZoFsM 10.57am GMT How will Mark Carney explain the Bank of Englands failure to keep inflation to target if, as appears likely, it falls below 1%.Ill decide what I write in my letter to the chancellor if, and when, I write it, Carney replies. At the moment, its more likely than not than I will write it, but its not certain. 10.57am GMT #BoE cuts UK forecasts as risks from euro area crystallize - says inflation could fall below 1% within months 10.55am GMT The Bank looked through inflation when commodity prices were pushing prices up, so will they do the same now the falling oil price is pushing inflation down?Carney replies that yes, there is a symmetry, but not a blind symmetry. 10.51am GMT What does rising real wages mean for interest rates?Carney replies that borrowing costs will rise at a gradual pace and a limited extent. 10.50am GMT Does todays unemployment data, showing wages rising ahead of prices, means the cost of living squeeze over?Carney isnt blowing any trumpets, warning that one swallow doesnt make a summer. But he does predict that wages will rise above inflation next year (especially if inflation falls below 1%).Carney says he expects average wages to rise by 3 per cent in 2015 10.48am GMT OUCH. How embarrassing is it that the Bank of England had to fire its chief FX dealer yesterday (see 8.08am for details)Mark Carney replies that the Bank holds itself to the highest standards, so it held a full inquiry into its role in the foreign exchange rigging scandal.Carney, on the dismisal of Martin Mallet (Chief FX Dealer from the BoE) which was announced this morning. His failing was not to escalate. 10.48am GMT Carney says "marginal role for fiscal policy" in stimulating euro zone. Backs up Draghi message to Germany 10.42am GMT Does the Bank of England want the European Central Bank to do more stimulus measures?UK is getting imported disinflation from Europe. We are not seeing wider damage. 10.41am GMT The FT explains how the BoE has trimmed its growth and inflation forecasts, a little:The Monetary Policy Committees growth forecasts were revised down a little from the forecasts published in August, reflecting a weaker global economic outlook and slower housing market.But this weakness was offset by lower assumptions for interest rates leaving the growth and inflation forecasts stable three years ahead.Bank of England cuts growth, inflation forecasts http://t.co/b0Yi1pttW9 10.40am GMT Carney: What really matters is broad shape of tightening. Not WHEN first rate hike happens 10.39am GMT What really matters is the broad process of monetary policy, not a specific date for the first interest rate rise, Mark Carney insists. 10.39am GMT Despite the global gloom, the Bank of England still reckons the UK can grow at above trend levels.Carney cites the prospect of wages (FINALLY) growing faster than inflation, and confidence in the recovery. 10.38am GMT The global economy has been moribund since the last quarterly inflation report three months ago, Mark Carney says.He is particularly gloomy about the eurozone -- saying that the spectre of stagnation is haunting Europe.'A spectre is haunting Europe, the spectre of stagnation' - Carney 10.36am GMT The pound has dipped as foreign exchange traders digest the quarterly inflation report.RT @FerroTV: BoE = Dovish. pic.twitter.com/X7wFyvuMGs 10.33am GMT Breaking: the Bank of England signaled interest rates could remain on hold until next autumn as inflation is likely to fall below 1% in early 2015.Plunging commodity prices and weak wage growth against a sluggish backdrop for global growth have triggered a drastic change of view on the outlook for inflation, which is now expected to take three years to return to the Banks 2% target.The Banks November inflation report suggested the City was right to expect rates to be left on hold at an all-time low of 0.5% until October next year. At the time of the last inflation report in August, the Bank had been signalling that a pre-election rate rise in February was most likely. 10.29am GMT Nearly time for the next event of the day, the Bank of Englands quarterly inflation report.It will be streamed live here. 10.28am GMT City law firm RPC has predicted that banks will face a flood of lawsuits from customers who lost out because of the manipulation in the financial markets Simon Hart, Banking Litigation Partner at RPC, says that some clients have already got in touch... These fines and the evidence published today could trigger a flood of civil litigation from pension funds and other fund managers that lost money because of Forex manipulation moving prices against them.We anticipate a much larger number of high value disputes against the banks because of Forex manipulation than we saw over Libor rigging because it should be much easier for market participants to prove that they lost money. 10.25am GMT John Mann MP has weighed in, demanding that banks pay todays fines out of their bonuses, not their profits:This fraudulent trading has taken place over a five-year period during which time the taxpayer has had to provide massive financial assistance to the banking sector and we have clearly been taken for a fool by the bankers.What must happen now is that the bankers and senior managers are actually held accountable for this behaviour and RBS, the taxpayer-owned bank, must ensure that these fines are paid from its bonus pool and not simply taken from its profits. 10.18am GMT Campaigners are shocked that the foreign exchange market was being rigged five years after the financial crisis began. Heres David Hillman, Robin Hood Tax spokesperson:Whats truly shocking is that this blatant corruption carried on for years after the financial crisis. Not content with crashing the economy banks continued manipulating markets and ripping us off while at the same time telling us they had changed.It is good news the Chancellor has promised some of the £2bn will be used for the wider public good but he can no longer pretend that one-off fines are enough to change banks greed obsessed culture. Its time the Government dropped its opposition to the financial transactions tax which would make markets harder to scam and at the same time make banks contribute to the wider interests of society. 9.59am GMT Heres a very brief recap before the next event of the day, the Bank of Englands quarterly inflation report.Five banks have been fined a total of £2bn for their role in the manipulation of the global currency markets. 9.50am GMT The latest UK unemployment data hit the wires while I was on that FCA call.The top line is that the jobless rate remained at a six-year low of 6.0%, and wages are finally growing faster than inflation again Unemployment figures released: Politics Live blog http://t.co/0YjGKiQP7fHeres earnings vs inflation post-crisis. Its the 1st time wages ex bonuses have surpassed CPI. But not inc bonuses pic.twitter.com/TuJMb6x2OZ 9.46am GMT And thats the end of the FCAs press conference (highlights start here).No big fireworks, but notable that financial reporters arent terribly impressed with the regulators conduct. 9.44am GMT How much money has the FCA now raised from the banking sector since the financial crisis began, and where will todays fines go?Full details of historic fines are on the FCAs website, and todays money will go to the Treasury (once the regulators costs are deducted) 9.42am GMT How many firms are still being investigated?Only Barclays.FCA says it's done with FX enforcement, apart from Barclays. Other, unnamed banks have had to take remedial action. 9.41am GMT Whats the status of the Libor investigation? (which began several years ago).Investigations are ongoing, and ongoing criminal prosecutions are underway, scheduled to run until 2016 and beyond. 9.37am GMT Does the failure to get a settlement with Barclays mean the FCA has failed to get the co-ordinated agreement it wanted?No, Tracey McDermott insists. We wanted to get a co-ordinated settlement with as many firms as possible. Barclays chose not to take part. But this is the biggest fine weve ever imposed. We dont see this as a failure at all. 9.35am GMT Could any of the deferred prosecution agreements that banks currently hold with the US Department of Justice have been broken by the FX scandal?Tracey McDermott replies that the FCA is in close talks with US regulators over this issue.....FCA says it is in "close discussions" with US DoJ in relations to potential DPA breaches in light of forex fines. Watch this space... 9.34am GMT Have the UK banks actually suffered any reputational damage through the series of scandals that have rocked the City? After all, theyve got roughly the same number of customers since the financial criss began?Martin Wheatley insists that banks have suffered damage to their public image. 9.30am GMT Are the days of London gold-plating international financial standards over?Wheatley says that the only way to improve standards is through international agreements, even though London controls around 40% of the FX market. 9.30am GMT 9.28am GMT Isnt it simply absurd that the FX market was not regulated properly for so long?Not sure that you can say its absurd, Wheatley replies. 9.26am GMT How much damage has been caused to the reputation of the City?These scandals do hurt market confidence, Wheatley replies. 9.25am GMT Does the fact that the FX market was being manipulated until October 2013 show that banks learned nothing from Libor?Martin Wheatley replies that the FCA is concerned that the affair went on too long. 9.24am GMT Who decided to pursue a group approach to the investigation? The FCA did, Wheatley replied. We didnt want a repeat of the Libor investigation, which dragged on a long time. We want to get changes made quickly. 9.23am GMT Should bank bonuses be cut?The FCAs Clive Adamson explains that the FCA reviews banks bonus proposals and any malice adjustments they are planning to make. 9.21am GMT Why should banks get a 30% discount on their fines for settling early, when the evidence of misconduct is so clear?Tracey McDermott says the FCAs policy is clear and open, and similar to criminal law where offenders get a sentence reduction for settling early. 9.17am GMT Does the FCA reject the suggestion that some of this collusion was to do with day-to-day market operation, rather than something worse?Clive Adamson, the FCAs director of supervision, isnt convinced by this argument. 9.15am GMT Have consumers lost out?Wheatley explains that FX traders were moving FX rates by two or three basis points. Thats a smaller margin than you or I would normally get at the airport. 9.13am GMT Martin Wheatley: Industry needs to get it right and get it right quickly #fx pic.twitter.com/UmPKrF0Yh7 9.12am GMT Why did it take the regulator so long to spot that this misconduct was taking place? Its not fair to say we took too long, Tracey McDermott replies. We took action once we were alerted to the problems, and have conducted our probe within a year. 9.10am GMT Why did some bank shares rise this morning?Markets dont like uncertainty, Wheatley replies. 9.10am GMT Could there be criminal charges against individuals?The Serious Fraud Office is already investigating. 9.08am GMT Onto questions. What happens next, and whats the plan for banks who have not settled today?Tracey McDermott, the FCAs director of enforcement and financial crime, says that the issue is now closed with the five banks who have settled. 9.07am GMT The industry must prove it has changed if it is ever to recover the trust it has lost, Martin Wheatley concludes. 9.07am GMT Wheatley says the UKs Fair and effective market review will continue.We expect firms to put conduct at the heart of their business, and improve standards from the trading floor to the boardroom, he adds. 9.05am GMT Some FX traders have abused the trust of their employers and the regulator, Martin Wheatley adds. 9.04am GMT Martin Wheatley, of the FCA, begins the press conference by confirming that todays fines, totalling £1.1bn, are the biggest in the regulators history. It reflects the serious of the failings we have uncovered, and which put the integrity of Britains financial system at risk, he says. 9.02am GMT Over in Canary Wharf, the Financial Conduct Authority is beginning a press briefing on todays fines. Ill cover the key points in this blog. 9.01am GMT City editor Jill Treanor writes:The corruption of the worlds biggest currency dealers was laid bare on Wednesday when regulators imposed £2bn of fines on five major banks for rigging the £3.5tn a day foreign exchange markets.Regulators said they had found a free for all culture rife on their trading floors which allowed the markets to be rigged for five years, from January 2008 to October 2013. 8.56am GMT A JP Morgan spokesperson has responded thus (via the WSJ):The trader conduct described in todays settlements is unacceptable. In addition to making significant improvements to our systems and controls, we have spent a lot of time reinforcing the high standards of conduct expected of our people. Although the settlements acknowledge our progress, further training and enhancements are ongoing and will remain a priority. 8.52am GMT Banking analyst Sandy Chen of Cenkos reckons that Barclays failed to settle today because of the non-prosecution agreement it currently holds with the US Department of Justice, dating back to the Libor scandal.He adds:Barclays doesnt have much bargaining power versus the US DOJ and other regulators, in our view; the risks are that (1) Barclays £500m of forex provisions wont be enough, and (2) the LIBOR NPA unravels. 8.43am GMT Treasury minister Andrea Leadsom has pledged that the traders responsible for manipulating the FX market will not be back in a dealing room on a big salary and everything that can be done to punish this type of behaviour will be done.She told BBC Radio 4s Today programme: Its completely disgusting. I think taxpayers will be horrified... I dont know if corruption is a strong enough word for it. 8.37am GMT The FCA has produced a very good video, explaining in some detail how the foreign exchange market works, and how traders conspired to manipulate it.Well worth watching, so Ive embedded it (if it doesnt work for you, its also online here) 8.18am GMT And shares in UBS have risen by 0.7% in early trading. 8.17am GMT Shares in Barclays have fallen 1% in early trading in London, as traders ponder why the bank has not settled with regulators.RBS are down just 0.1%, and HSBC are down 0.4%. 8.08am GMT The Bank of England has declared that its own investigation into the forex rigging scandal found no evidence of wrong-doing at Britains central bank.Following a disciplinary process unrelated to Lord Grabiners investigation, the Banks Chief FX Dealer, who was suspended in March, was dismissed on 11 November for serious misconduct relating to a failure to adhere to the Banks internal policies. The individuals dismissal was not at all related to the allegations investigated by Lord Grabiner, but as a result of information that came to light during the course of the Banks initial internal review into allegations relating to the FX market and Bank staff. This information related to the Banks internal policies, not to FX. 8.04am GMT Best thing about FCA fines is always the chat logs: "RBS is god"..."we fooking killed it right" pic.twitter.com/OiNKe5KZAA 8.00am GMT Banking analyst Christopher Wheeler reckons Barclays shareholders may be alarmed that it has not settled with the FCA and the CFTC, and is instead pursuing its own path. The forex overhang not helpful for Barclays. Market bound to think the worse until the situation is clarified.Forex fines surprisingly low given market manipulation...out of kilter with money laundering/sanctions busting fines. Very good for UBS. 7.58am GMT The FCA has also released transcripts from private chat rooms.Its settlement with HSBC shows traders at different banks chatting before the daily 4pm forex fix. The transcripts show traders agreeing to team whack a currency, and congratulating each other afterwards."He expected Firm A to 'bash the fck out of it'." Scuse my French so early. From HSBC's final FX notice: http://t.co/o8eOPzy4o5 7.53am GMT One of the most alarming elements of the foreign exchange rigging scandal is that firms are accused of triggering their own clients stop loss orders.Those orders are meant to help a company manage the risk of Forex rate movements -- if a currency moves too much one way or another, they are stopped out of the market, with a fixed loss.These attempts involved inappropriate disclosures to traders at other firms concerning details of the size, direction and level of client stop loss orders. The traders involved would trade in a manner aimed at manipulating the spot FX rate, such that the stop loss order was triggered. HSBC would potentially profit from this activity because if successful it would, for example, have sold the particular currency to its client pursuant to the stop loss order at a higher rate than it had bought that currency in the market.@LadyFOHF @graemewearden triggering client stops is a BFD from my perspective. 7.46am GMT Heres a better link to the CFTCs transcripts of private chat room conversations (the 7.25am link may not work, sorry) 7.37am GMT This transcript shows FX traders at three banks discussing whether to invite a fourth into their chatroom.One trader urges caution, as we dont want other numptys (sic) in the market to know what theyre up to. 7.25am GMT No financial scandal is complete without a set of juicy transcripts showing traders breaking the rules with abandon.And today, we have several examples of employees at several banks discussing how to rig the FX rates, in private chat rooms. 7.09am GMT Royal Bank of Scotland says that it is reviewing the conduct of over 50 current and former members of trading staff around the world.Today is a stark reminder of the importance of culture and integrity in banking and we will rightly be judged on the strength of our response.We take these criticisms extremely seriously and are acting to ensure that our employees adhere to the highest standards and that our systems and controls are fit for purpose 6.58am GMT The Chancellor George Osborne has declared that todays fines for currency manipulation will help clean up corruption in the financial markets.Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone. Its part of a long term plan that is fixing what went wrong in Britains banks and our economy.A number of traders have been suspended or fired, and the Serious Fraud Office are conducting criminal investigations. The banks that employed them face big fines - and I will ensure that these fines are used for the wider public good. 6.49am GMT Bank (eg RBS) FX fine disclosures make clear: they were ripping off their own clients to benefit themselves 6.48am GMT So how did traders at some of the worlds largest banks conspire to rig the currency markets?Traders shared the information obtained through these groups to help them work out their trading strategies. They then attempted to manipulate fix rates and trigger client stop loss orders (which are designed to limit the losses a client could face if exposed to adverse currency rate movements). This involved traders attempting to manipulate the relevant currency rate in the market, for example, to ensure that the rate at which the bank had agreed to sell a particular currency to its clients was higher than the average rate it had bought that currency for in the market. 6.48am GMT Remarkably, this misconduct took place over more than five years, and only ended a year ago.FCA says the problems took place between January 2008 and October 2013 6.45am GMT And heres how the fines from Americas CFTC break down:$310m on both Citibank and JPMorgan, $290 million each on Royal Bank of Scotland and UBS and $275 million on HSBC.. 6.38am GMT The FCA also says that it will progress our investigation into Barclays.As City editor Jill Treanor explains, Barclays was expected to settle with the FCA and CFTC, but has now got it alone...The FCA agreement had expected to include Barclays: regulator says "will progress investigation in to that firm"Barclays says had been offered the same deal as others but has decided to do a settlement with a broader group of regulators 6.33am GMT The Financial Conduct Authority has issued a pretty damning statement into the misconduct at these five banks. It declared that: At the heart of todays action is our finding that the failings at these Banks undermine confidence in the UK financial system and put its integrity at risk. 6.31am GMT Martin Wheatley, chief executive of the FCA, says the regulator is not prepared to tolerate conduct which imperils market integrity or the wider UK financial systemTodays record fines mark the gravity of the failings we found and firms need to take responsibility for putting it right. They must make sure their traders do not game the system to boost profits or leave the ethics of their conduct to compliance to worry about. 6.28am GMT Todays fines are the largest ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA), and this is the first time the FCA has pursued a settlement with a group of banks in this way. 6.22am GMT Good morning. Its another dark day for the banking sector, with several of the worlds biggest financial institutions being fined for their role in rigging the global foreign exchange market.FCA fines five banks £1.1bn for failing to spot problems in their foreign exchange business Continue reading...
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