It’s 20 minutes before 4 p.m. in London and currency traders’ screens are blinking red and green.
Some dealers have as many as 50 chat rooms crowded onto four monitors arrayed in front of them like shields. Messages from salespeople and clients appear, get pushed up by new ones and vanish from view. Orders are barked through squawk boxes.
Bloomberg reports that this is the closing 'fix', the thin slice of the day when foreign-exchange traders buy and sell billions of dollars of currency in the unregulated $5.3-tril-a-day foreign-exchange market, the biggest in the world by volume, according to the Bank for International Settlements. Their trades help set the benchmark WM/Reuters rates used to value more than $3.6tril of index funds held by pension holders, savers and money managers around the world.
Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at firms, including JPMorgan, Citigroup, UBS and Barclays, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.
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