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“Financial authorities in Europe, the US and Asia are conducting a joint investigation of banks that are active internationally and suspected of large-scale manipulation of exchange rates”, announces Süddeutsche Zeitung.
Investigators aim to determine if the banks speculated on foreign currencies to influence their value at specific times. As SZ explains, “advance knowledge of exchange rates can be converted into ready cash, because banks can gamble on these outcomes.” According to the German Federal Financial Supervisory Authority, the banks are also suspected of entering into illegal agreements with each other, points out SZ, which adds —
If these suspicions are confirmed, the amounts involved may be even bigger than those in the Libor scandal, in which the banks allegedly manipulated key interest rates. [...] Manipulation is damaging to anyone exchanging currencies — from the largest consortiums to private customers.
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