UPDATE 1-NY regulator wants monitors in Deutsche Bank, Barclays -source

Tue Jul 29, 2014 5:41pm EDT

* Bank monitors sought as part of forex market probe - source

* Monitors to review historical conduct, current operations

* Deutsche Bank says cooperating with investigators (Recasts with information from source)

July 29 (Reuters) - New York's banking regulator is seeking to place government monitors in the U.S. offices of Deutsche Bank AG and Barclays Plc as part of its investigation into the foreign-exchange market, a person familiar with the matter said.

The New York Department of Financial Services was pushing to install monitors at the two banks to review historical conduct and current operations, the person said.

The state regulator this year joined a global probe into possible manipulation of the $5.3 trillion-a-day currency market.

The New York investigators expect to reach an agreement soon with the banks to install on-site monitors, the Wall Street Journal said citing people familiar with the matter. (on.wsj.com/UzWqy1).

Deutsche Bank and Barclays have been selected to host monitors because data collected point to the greatest potential problems there, the Journal said.

Barclays declined to comment and Deutsche Bank did not address questions about monitors.

"The bank is cooperating with those investigations, and will take disciplinary action with regards to individuals if merited," a Deutsche Bank spokeswoman said in an email to Reuters.

A spokesman for the regulator was not immediately available. (Reporting by Karen Freifeld in New York and Anil D'Silva in Bangalore; Editing by Rodney Joyce)