Osborne Aiming to Increase Foreign Exchange Oversight

by on June 2, 2014 7:32 pm BST

The United Kingdom Chancellor of the Exchequer George Osborne is aiming to increase oversight in the highly unregulated foreign exchange market. Regulators have been actively engaged since Bloomberg News broke news that traders intentionally manipulated currency rates for personal and institutional gains via the one minute window, for major currencies, prior to WM/Reuters updating exchange rates.

Measures from Osborne will be considered in conjunction with the Financial Stability Board. The plans are likely to be announced by mid-June, while the Chancellor will give an annual speech to bankers on June 12. It is important to Osborne that the government stops potential abuse and weakness within the financial markets.

There have been nine financial institutions that have been fined roughly $6 billion for manipulating the London interbank offer rate, or LIBOR. UK bank Barclays PLC was fined £26 million recently for manipulation of the gold market by the Financial Conduct Authority (FCA). The FCA reported that the manipulation by Barclays took place a single day after the institution was fined for rigging the LIBOR rate.

“Ensuring confidence in the fairness and effectiveness of financial markets is central to this, which is why we’ve taken action to reform Libor, and why we’re now using the lessons we have learned here to inform and shape the important ongoing global debate on benchmark reform,” said the Treasury.