Debelle and Fisher to head up FSB FX benchmarks review

The Financial Stability Board (FSB) is to include foreign exchange in its ongoing review of financial benchmarks, the Basel-based advisory group on financial regulation announced on Friday.

The FSB has set up a new sub-group called Foreign Exchange Benchmarks, chaired by Guy Debelle, assistant governor at the Reserve Bank of Australia and Paul Fisher, executive director for markets at the Bank of England (BoE).

The newly set-up working group will undertake "a review of FX benchmarks and will analyse market practices in relation to their use and the functioning of the FX market as relevant", the FSB said. The group's findings will be presented to the 2014 G-20 summit in Brisbane in November.

"Recently, a number of concerns have been raised about the integrity of foreign exchange rate benchmarks. The FSB has consequently decided to incorporate an assessment of FX benchmarks into its ongoing programme of financial benchmark analysis," the FSB said in a press release on Friday.

Allegations of collusion, market manipulation and improper practices around the WM/Reuters benchmark have plagued currency markets since the middle of last year, with regulators across the globe starting official investigations in October 2013.

Switzerland's Financial Market Supervisory Authority also announced it was pursuing allegations against Swiss banks that they had been involved in the practice. By the end of October, senior forex traders at Standard Chartered, Citi and JP Morgan had been put on leave as regulatory investigations picked up pace. Last week, Deutsche Bank fired four traders in connection with the matter. UBS, Barclays, and RBS have also suspended traders.

The BoE is also facing allegations that a sub-group of its Foreign Exchange Joint Standing Committee knew of attempts to manipulate daily forex benchmarks. Andrew Bailey, deputy governor of the BoE and head of the Prudential Regulation Authority, told the UK parliament's Treasury Select Committee earlier this week that he had seen 'no evidence' that the bank had done anything wrong.