LONDON, March 17 The European Union's markets
watchdog is studying the foreign exchange market following
allegations that some of its benchmarks may have been
manipulated by banks.
Regulators from Britain, the United States and elsewhere are
probing the role of several banks and their staff in compiling
foreign exchange benchmarks that are widely used.
In the $5.2 trillion a day foreign exchange market,
benchmark "fixes" offer set times of the day when asset managers
do a lot of business through the banks. It gives them an
identical daily reference point for both the value of funds and
foreign exchange conducted that day.
"We are looking at the sector and we are collecting data,
but we have no direct powers regarding any enforcement issues,"
European Securities and Markets Authority (ESMA) Chairman Steven
Maijoor told Reuters, declining to elaborate.
"It's clearly a national issue when it comes to
enforcement," Maijoor added.
ESMA coordinates the application of EU securities rules,
such as those to stop market abuses, across the 28-country bloc.
The watchdog has already introduced changes to the
compilation of another market benchmark, the euro interbank
offered rate or Euribor, after banks were fined for manipulating
The European Union is working on a new law to regulate all
benchmarks, which is likely to include those used in the foreign
exchange markets, and ESMA will be responsible for fleshing out
measures to implement it, probably sometime in 2015.