A widening probe of price-fixing and manipulation among banks is finally zoning in of late on the foreign-exchange(FX) market.
At 5 trillion+ dollars a day of trading, global currency markets are huge and impact everyone and yet have typically been the most opaque, forcing customers and clients to be largely ‘price-takers’ relying on the quotes of traders and salesmen. This has made the market rife for price-fixing and unfair advantage by the dominant players. Here is a direct link to a video report: FX market isn’t fit for job.
Recently several high profile heads of FX departments at large banks have been fired. This leaves some of us wondering what investigative findings may be coming next. One thing for sure: computers (algo trading) are taking over the FX area now too. See: FX Traders Facing Extinction as computers replace humans
Given the enormous impact of FX exchange on global trade and relations, it is key that reforms demand greater transparency leaving less room for abuse, spread and profit gouging for the banks.