Still Using Banks for Foreign Currency Exchange?
Something caught our eye in the news this morning –
That’s right, five big banks have been fined a combined £2 billion for “traders’ attempted manipulation of foreign exchange rates.” The five in question are HSBC, Royal Bank of Scotland, Swiss bank UBS, JP Morgan Chase and Citibank. There’s a separate investigation into Barclays still ongoing.
Five big banks have been fined £2 billion for attempting to manipulate international currency exchange rates
In a surprising move, it seems that some employees of these financial behemoths may face criminal charges. The investigations were a 13 month effort by regulators sparked by claims that currency exchange markets were being rigged in favour of the institutions, by manipulating the daily rates at which many contracts are settled. In a market which trades over $5 trillion daily – that’s $5,000,000,000,000 (12 zeros) – even the slightest manipulation in one direction (no, not the band) can mean huge profits for the side in control.
The Commodity Futures Trading Commission (CFTC) director of enforcement Aitan Goelman said – “The setting of a benchmark rate is not simply another opportunity for banks to earn a profit. Countless individuals and companies around the world rely on these rates to settle financial contracts.”
With CurrencyFair, you can often beat this interbank (benchmark) rate by setting your own price in the marketplace and waiting to get matched on the transaction.
They clearly did not have your (their customer’s) best interests at heart. The UK equivalent to the CFTC, the The FCA, said “tight knit groups” of traders at these banks referred to themselves as “the 3 musketeers”, “the A-team” and “1 team, 1 dream”.
See how CurrencyFair compares to other money transfer companies
While the fines are large sums of money for most people, it pales in comparison to the profits banks make each year. HSBC alone reported a 2013 pre-tax profit of £13.6bn, which for visual impact reads as £13,600,000,000.
Here at CurrencyFair, we take great pride in offering alternatives to traditional, slow, expensive and unfair bank charges, fees and services. We’ve even compared our rates to the main competitors (banks included) so you can see just how transparent we are, and how much money you can save.