Top 12 Business Stories 2013: FX Fixing Scandal (Photo: Reuters)
Top 12 Business Stories 2013: FX Fixing Scandal (Photo: Reuters)

Around $5tn changes hands in the world's currency market every day, making this the largest sector in the financial system.

Banks allegedly manipulating key foreign exchange contracts have, in 2013, become the focus of yet another major scandal.

IBTimes UK revealed in 2011 that a whistleblower had alerted regulators in the US, UK and Switzerland in 2011 about some of the world's largest trading companies and banks manipulating benchmark sterling, US dollar and Swiss franc currency rates. However, it is only this year that investigations have been carried out.

While details on the alleged FX fixing-related external and internal reviews and probes are still rather sketchy, a number of banks are reportedly spending millions on investigating allegations themselves.

In November, Lloyds Banking Group confirmed that it is reviewing its currency trading processes in light of a raft of regulatory investigations into the potential manipulation of the FX markets.

In October, the Royal Bank of Scotland revealed that it is assessing its currency trading processes in a bid to calm client fears over a potential marketing rigging investigations.

Deutsche Bank has also allegedly spent millions of dollars going through traders' emails and chat sessions looking for specific dates, phrases and keywords in a bid to root out evidence of wrongdoing.

Meanwhile, Barclays and HSBC confirmed that it is cooperating with Britain's Financial Conduct Authority and other regulators related to trading on the foreign exchange market by a number of firms.

Since then, six Barclays traders and two RBS traders have been suspended amid global regulatory investigations into potential attempts to manipulate the foreign currency markets.

It follows news that Citigroup, Standard Chartered and JPMorgan traders had been put on leave, though not suspended or suspected of wrongdoing, in relation to the same probes.

But banks seem to be trying to stop the flow of scandalous transcripts of traders talking to each other in chat rooms.

UBS, RBS, JPM and a number of others have banned traders from using instant messenger services.

However, 2014 looks like it could be a turbulent year for the banking industry as regulators across the world are expected to be nearing the end of their investigations into FX fixing.

Watch this space.

The Biggest World News Stories of 2013IBTimes UK