Reuters reported on the annual news conference held yesterday by the German financial regulator, Bafin. The biggest news relates to progress on their foreign exchange investigation. The regulator said that the probe was "much, much bigger" than the interest rate benchmark case. "There were clearly attempts to manipulate prices, that's what was disturbing." The Bafin spokesman said that these attempts involved fix rates in many different currencies, excluding the largest, such as euro vs. the dollar. The only currency mentioned was the Mexican peso.
For the first time the regulator let it be known that all FX banks in Germany have been asked to conduct internal investigations into potential misconduct and report back to Bafin. However, there is no need to lose sleep awaiting the final results of Bafin's probe, as the spokesman said that "we're not going to be done in 2014 ... but hopefully before 2018'". There are no indications that the spokesman was kidding.
While most regulator comments from around the world have been indicating that they are finding some misconduct on the part of banks attempting to manipulate FX fixes, interestingly, at the end of April, the UK FCA head of enforcement and financial crime said "we are at a relatively early stage of plowing through some pretty detailed analysis of what was happening". " We are some way away from saying there was actually misconduct at all". Several FCA officials have stated that their probe will last until at least 2015.
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