Swiss target 8 banks in forex probe

March 31, 2014: 10:23 AM ET
credit suisse zurich
Credit Suisse said it was "astonished" to be included in the probe, describing the allegations against it as "inappropriate and harmful."
LONDON (CNNMoney)

Swiss authorities say they've discovered signs of collusion in the foreign exchange market and launched an official investigation into eight banks.

The Competition Commission said there were ''indications" that the banks had manipulated currency rates by exchanging confidential information and coordinating foreign exchange transactions.

"Based on the information currently available, the competition authorities believe that the most important currencies were affected by this behavior," the commission said in a statement.

Swiss banks UBS (UBS), Credit Suisse (CS), Julius Baer (JBARF) and Zurcher Kantonalbank are under scrutiny, as are four global banks -- JP Morgan Chase (JPM), Citigroup (C), Barclays (BCS), and Royal Bank of Scotland (RBS).

And it may not end there.

"The competition authorities cannot exclude at this stage that other banks and financial intermediaries (brokers) were involved in the alleged agreements," authorities said.

Related: Michael Lewis: Markets are 'rigged'

Financial regulators around the world have been investigating whether banks tried to rig the $5 trillion-a-day foreign currency market.

In addition to the banks targeted by the Swiss, other regulators are looking at Deutsche Bank (DB), Goldman Sachs (GS) and HSBC (HSBC). The Bank of England has also been caught up in the allegations -- one employee has been suspended.

Regulatory and related legal action could drag on for years, and lawyers have said it may end up costing banks more in fines, settlements and damaged reputations than the Libor-rigging scandal.

The industry has paid about $6 billion in Libor-related penalties so far, and several former bankers and brokers are facing criminal charges.

Related: FDIC sues big banks over Libor

Most of the banks named in the Swiss probe declined to comment, or said only that they would cooperate with the investigation.

But Credit Suisse said it was "astonished" by the announcement, adding it had not been included in the commission's preliminary inquiry late last year.

"[It] contains incorrect references to Credit Suisse, and these allegations are both inappropriate and harmful to our reputation," the bank said in a statement, adding that it would cooperate fully.

Private bank Julius Baer said its own internal investigations had found "no evidence of market abuse," but it too would work with the commission.

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