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BNP fined by Fed for historic FX market manipulation

First Published 19th July 2017

The Federal Reserve has fined the American branches of BNP Paribas over 246 million USD for "unsafe and unsound banking practices" during the period June 2007 until October 2013.

According to the regulator, BNP "lacked adequate governance, risk management, compliance, and audit policies and procedures" to ensure that the bank's spot FX trading complied with both "internal policies" and "safe and sound banking practices". The problems highlighted by the Fed included: "disclosures of trading positions and discussions of coordinated trading strategies with traders of other institutions" [including via chatrooms]; "discussions about anticipated FX benchmark fix-related trading and submissions with traders of other institutions"; and "discussions of trading in a manner to trigger or defend certain FX barrier options".

The French bank already paid 350 million USD to New York State's Department of Financial Services in May 2017 for the same offences over the same period. BNP still faces a penalty from the South African regulators as the market manipulation involved the South African rand.