Regulators on both sides of the Atlantic were working late Tuesday to announce a multibillion-dollar settlement with at least five global banks to resolve charges of attempted currency manipulation in key markets for the euro, U.S. dollar, , and British pound, people familiar with the matter said.
Officials at the U.K.'s Financial Conduct Authority (FCA), which led the currency probes, and the U.S. Commodity Futures Trading Commission (CFTC), which began investigating at a later stage, are prepared to release the details of their accords at 1 a.m. ET and 6 a.m. London time on Wednesday, one person said, after a number of key players agreed to settle the charges for financial penalties totaling close to $3 billion.
The banks – JPMorgan Chase, Citigroup, HSBC, RBS, and UBS – will pay roughly $1.2 billion to the FCA and roughly $1.5 billion, or about $300 million apiece to the CFTC, with some paying slightly more and some less, one person said.
The likelihood and basic contours of Wednesday's settlement was reported by the Wall Street Journal and the New York Times on Tuesday.
The Office of the Comptroller of the Currency and the Swiss Financial Market Supervisory Authority are also likely to make announcements of currency-probe resolutions on Wednesday, said two people familiar with the matter. But the Federal Reserve and New York State's Department of Financial Services would not, one of these people added, a sign that addition settlements -- or charges -- could be yet to come. The U.S. Department of Justice is also investigating the banks' currency trading, and could yet bring criminal charges, the people added.
Barclays, which according to these people dropped out of the resolution talks amid concerns that certain other currency-manipulation investigations would remain ongoing, and Deutsche Bank, they said is also under scrutiny by regulators, were absent from the group of banks planning to settle on Wednesday.
The charges being settled Wednesday relate to attempted manipulation in a handful of currency-pair markets, including the euro-dollar, dollar-yen, and dollar-sterling market, one of the people said. Yet, despite the size of the expected financial penalties and the public attention to the cases, the investigations by some of the regulators involved was only cursory, said a second person familiar with the matter, potentially leaving doubts about the effectiveness of the settlement pacts.