Six major banks reportedly face fines

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SIX banks are facing record fines after the City regulator reportedly began talks to settle an investigation into the manipulation of currency markets.

The Financial Times said each of the banks - Barclays, HSBC, Royal Bank of Scotland, Citigroup, JP Morgan Chase and UBS - could be hit with fines in the hundreds of millions of pounds from the Financial Conduct Authority (FCA).

The settlement talks are forecast to last around two months, meaning that the findings of the FCA investigation could be published before the year end.

The UK penalties are likely to exceed the biggest fine of £160m paid by UBS over revelations relating to the fixing of the interbank Libor rate.

FCA chief executive Martin Wheatley said earlier this year that allegations surrounding foreign exchange trading were ‘’every bit as bad’’ as the Libor rate-rigging scandal, which cost several banks billions in fines.

Last October, the FCA said it had joined other international regulators in scrutinising firms over potential manipulation of the £3 trillion a day forex market.

Benchmark rates are used for hundreds of trillions of dollars-worth of loans and transactions around the world and are calculated using submissions from panels of banks about the rates at which they believe they can borrow every day.

The FCA declined to comment yesterday.