Description: Following on the heels of the Libor scandal (in which banks were found out for manipulating short term interest rates), on Wednesday documents disclosed that six large banks were fined $4.3 billion (yes, that’s billion with a “B”) for manipulating the foreign exchange market. Additional fines and civil suits could keep this nasty story alive for years. The British Treasury Minister stated in an interview with BBC that “I don’t know if corruption is a strong enough word for it.”
Source: The Globe and Mail.com
Date: November 13, 2014
1) What impact will this story have on the public’s trust of large financial institutions?
2) If you were charged with governance of one of the six banks, how would you proceed in dealing with this situation?
3) What impact would these manipulations of foreign exchange transactions have on accounting for foreign exchange?