Hong Kong Banking Regulator Opens Inquiry Into Currency Manipulation

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Offices of the Hong Kong Monetary Authority.Credit Dale De La Rey/Agence France-Presse — Getty Images

HONG KONG — The global investigation into currency market manipulation spread to another major market on Tuesday, with Hong Kong’s banking regulator saying it had opened an inquiry into several banks.

The Hong Kong Monetary Authority, which oversees banks and other financial institutions in the Asian financial hub, said in an emailed statement that it was “investigating a number of banks in Hong Kong by requiring them to conduct independent reviews of their FX operations and submit the results to the H.K.M.A.” FX is an abbreviation for foreign exchange.

“The reviews are in progress,” the regulator said. It is “also liaising with relevant overseas bank supervisors on the matter,” it added.

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Hong Kong joins the authorities in the United States, Europe and other jurisdictions that are trying to determine whether traders at some of the world’s biggest banks conspired to manipulate exchange rates in global currency markets.

More than two dozen traders in bank offices around the world have been placed on leave or fired as a result of internal investigations at several large financial institutions involved in foreign exchange trading, including Barclays, JPMorgan and Royal Bank of Scotland Group.

The foreign exchange trading inquiries began last year in some of the biggest financial markets, and come shortly after similar action against the global rigging of benchmark interest rates, which has resulted in billions of dollars in fines at large banks in the United States and Europe.

On Monday, Switzerland’s Competition Commission opened a formal investigation into eight financial institutions over whether their traders conspired to manipulate currency markets.

In Asia, regulators in Singapore said last year that they were working with overseas counterparts in an investigation. The Southeast Asian city-state is the world’s third-biggest market for foreign-exchange trading, after London and New York, according to data from the Bank for International Settlements. Tokyo is the fourth-biggest market for such trades, and Hong Kong is the fifth.

Last month, Hong Kong wrapped up its own investigation into interest rate rigging. The H.K.M.A. found that, after looking into nine banks active in the city, only UBS was determined to have tried to manipulate the benchmark Hong Kong dollar interbank interest rates. However, the Swiss bank escaped being fined, as it was found by the regulator to have been unsuccessful in its attempts.