Rogue City traders face long jail terms: Osborne to crack down on market rigging
- Government already cracked down on abuse of the London Interbank Offered Rate (Libor)
- Chancellor will use his annual speech at Mansion House to announce further measures
- Manipulating the foreign exchange market is expected to attract unlimited fines and up to seven years in jail.
In his Mansion House speech, the Chancellor will announce plans for new criminal sanctions designed to clean up the City
City traders who manipulate foreign exchange and other markets in London will face years in jail, George Osborne will warn today.
The Chancellor will announce plans for new criminal sanctions designed to clean up the City, which has been the subject of a series of investigations following allegations of abuse.
‘The integrity of the City matters to the economy of Britain,’ he will say. ‘Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.
‘I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.’
The Government has already cracked down on abuse of the London Interbank Offered Rate (Libor) – the rate at which banks lend money to each other – after it emerged that traders had been manipulating it to their own advantage for years.
Today the Chancellor will use his annual speech at Mansion House in the City, in which he addresses leaders of the financial industry, to announce further measures.
They will include new oversight of the £3trillion-a-day foreign exchange market following allegations of market manipulation. Despite being one of the world’s largest financial markets, the foreign exchange market has largely escaped regulation.
Prices for transactions are usually fixed by traders involved in the deals. More than 40 currency dealers around the world have been fired or suspended following claims that traders used client order information improperly to attempt to manipulate prices.
Even the Bank of England suspended an employee earlier this year after an internal investigation. Mr Osborne is now proposing a more formal system to set prices for transactions and greater transparency.
Bank of England governor Mark Carney is expected to signal measures to reduce risks to the economy from rapidly rising house prices
Manipulating the foreign exchange market is to be made a criminal offence, in line with measures introduced last year in the wake of the Libor fixing scandal.
The offence is expected to attract unlimited fines and up to seven years in jail.
Legislation will also be extended to cover the bonds and commodity markets amid fears about the damage allegations of abuse are doing to London’s standing as a leading financial centre.
Mr Osborne will say that the UK will not opt in to forthcoming EU rules. He will insist that Britain’s new regime will be as strong or stronger than those proposed by Brussels but will preserve flexibility.
The Chancellor will say that a joint review by the Treasury, the Bank of England and the Financial Conduct Authority into the way key financial markets operate will take place over the next 12 months and draw up further measures.
Bank governor Mark Carney, who will also address the Mansion House today, is expected to signal measures to reduce risks to the economy from rapidly rising house prices.
Next week the Bank is expected to consider tighter curbs on mortgage lending.
Cathy Jamieson, Labour’s Shadow Financial Secretary to the Treasury, said: ‘This review is too little, too late.’
Read more: http://www.dailymail.co.uk/news/article-2655770/Rogue-City-traders-face-long-jail-terms-Osborne-crack-market-rigging.html#ixzz34QfMl5Pi
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