Australia: Two of the biggest banks admit to a currency ‘Cartel’

Two Australian banks have offered to pay fines for “cartel conduct” when trading foreign exchange contracts for the Malaysian ringgit, in the latest controversy engulfing banks and their manipulation of foreign exchange rates.

Australia’s No.1 investment bank Macquarie Group and top corporate lender Australia and New Zealand Banking Group on Friday said they offered to pay fines totalling A$15 million ($11 million). The two banks, however, will still face prosecution in Australia over the matter and, potentially, from overseas authorities.

The admission may provide further ammunition for a recent Malaysian government crackdown on foreign banks trading in the ringgit in offshore market, seen by bankers as an attempt to curb a devaluation of the currency.

The two Australian banks said in separate statements they offered to pay the fines after the antitrust agency started court proceedings over the companies’ actions in Singapore when trading foreign exchange contracts for the Malaysian ringgit in 2011.

“These proceedings are a reminder that Australian cartel laws apply to financial markets, and capture cartel conduct by firms that carry on business in Australia, regardless of where that conduct occurred,” Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said in a statement.

Separately, three major Australian retail banks, including ANZ but not Macquarie, are defending charges laid by the country’s securities regulator over allegations they manipulated the benchmark bank bill swap reference rate.

Full Content: Reuters

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