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Britain's finance minister George Osborne this week rejected European Union plans to outlaw currency market manipulation and instead set out his own proposals to make rigging exchange rates a criminal offence.
A panel led by the Bank of England and including the Treasury and Financial Conduct Authority will recommend new criminal sanctions which meet the needs of London, where much of the largely unregulated FX market takes place.
Osborne's announcement comes as regulators around the world investigate allegations of collusion and price-manipulation in the $5-trillion-a-day market, by far the world's largest.
Since the allegations first surfaced last year, some 40 traders have been placed on leave, suspended or fired by some of the world's biggest banks.
No individual or bank has been accused of wrongdoing and no evidence of wrongdoing has been found. All the banks involved are cooperating with the regulators.
Below is a timeline on the scandal engulfing the FX market.
July 2006: Minutes of a meeting of the BoE's FX Joint Standing Committee's chief dealer sub-group say the group, chaired by BoE chief dealer Martin Mallett, discussed "evidence of attempts to move the market around popular fixing times by players that had no particular interest in that fix. It was noted that 'fixing business' generally was becoming increasingly fraught due to this behaviour".
Spring 2008: The Federal Reserve Bank of New York makes enquiries into concerns surrounding benchmark Libor interest rates, sharing its analysis and suggestions for reforms with "the relevant authorities in the UK".
May 2008: Minutes of a meeting of the BoE's FX Joint Standing Committee's chief dealers sub-group say there was "considerable discussion" on the benchmark "fixings" again.
July 2008: A meeting of the BoE's FX Joint Standing Committee's chief dealers sub-group discusses the suggestion "that using a snapshot of the market may be problematic as it could be subject to manipulation," BoE minutes say.
April 2012: As the Libor scandal reaches its zenith, the regular chief FX dealers' meeting included a "brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set piece benchmark fixings," BoE minutes say.
June 2013: Bloomberg News reports dealers used electronic chatrooms to share client order information to manipulate benchmark exchange rates at the 4:00 p.m. London "fixing".
July 2013: A scheduled chief dealers' meeting for 4 July never takes place.
Sept. 2013: Swiss bank UBS provides the U.S. Department of Justice with information on FX allegations in the hope of gaining antitrust immunity if charged with wrongdoing.
Oct 2013: The investigation goes global. The DOJ, Britain's Financial Conduct Authority and Bank of England and Switzerland's market regulator all open probes. The Hong Kong Monetary Authority says it is cooperating.
Dec 2013: Several banks, including JP Morgan Chase, Goldman Sachs and Deutsche Bank ban traders from multi-dealer electronic chatrooms.
Jan 2014: U.S. regulators visit Citi's main offices in London. Citi fires chief dealer Rohan Ramchandani, a member of the BoE-chaired chief dealers' sub-group and the first trader in the unfolding scandal to be sacked.
Feb 4, 2014: Martin Wheatley, chief executive the FCA, Britain's market regulator, says the FX allegations are "every bit as bad" as those in Libor. He also says the FCA's investigation will probably run into next year.
Feb 5, 2014: New York's banking regulator opens its investigation.
Feb 14, 2014: The Financial Stability Board, the world's top financial regulator which coordinates policy for the G20, says it will review FX fixings.
March 5, 2014: The Bank of England suspends an employee as part of its internal investigation.
March 11, 2014: The Bank of England announces a shake-up of the way it works with banks and financial markets, creating a new position of deputy governor responsible for banking and markets.
March 31, 2014: Swiss competition commission WEKO formally opens investigation into eight Swiss, UK and U.S. banks including Citi, RBS, JP Morgan, UBS and Credit Suisse AG over potential collusion to manipulate foreign exchange rates.
June 12, 2014: UK finance minister George Osborne rejects EU plans to outlaw FX market manipulation and instead sets out his own rules - "as strong or stronger than those of the EU" - to make rigging exchange rates a criminal offence. (Reporting by Jamie McGeever; Editing by Gareth Jones)
TIMELINE-The FX market fixing probe | Reuters
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