LONDON - The Financial Stability Board said Friday that it would review foreign exchange markets in light of a series of investigations into potential manipulation of currency benchmark rates.
The board, a task force set up by the Group of 20 last year, will examine the process for how foreign exchange rates are calculated and analyze market practices surrounding those currency rates.
“Recently, a number of concerns have been raised about the integrity of foreign exchange rate benchmarks,†the group said. “The F.S.B. has consequently decided to incorporate an assessment of FX benchmarks into its ongoing program of financial benchmark analysis.â€
The task force, whose chairman is Mark Carney, the Bank of England governor, has been working to ensure the transparency and reliability of global benchmark exchange rates following a series of scandals involving the London interbank offered rate, or Libor, and other benchmark rates.
Banks have paid billions of dollars of fines in the last two years stemming from the manipulation of those rates.
The board’s group examining the currency market will be led by Guy Debelle, assistant governor for financial markets at the Reserve Bank of Australia, and Paul Fisher, executive director for markets at the Bank of England.
Any recommendations the Financial Stability Board makes about overhauling the benchmark rates could only be implemented if financial regulators decide to act on them.
Many of the world’s largest banks, including Citigroup, UBS and Goldman Sachs, have acknowledged that they are facing inquiries from regulators in Britain, the United States and other parts of the world into potential manipulation of the currency markets.
Last week, the New York State Department of Financial Services became the latest regulator to join the fray, requesting documents from a number of banks, including Credit Suisse, the Royal Bank of Scotland and Deutsche Bank, according to a person briefed on the matter.
The Department of Financial Services, headed by Benjamin M. Lawsky, is the first state regulator to scrutinize currency trading. Its jurisdiction covers any bank operating with a New York State charter.
Martin Wheatley, the chief executive of Britain’s Financial Conduct Authority, has said that the currency manipulation allegations are “every bit as bad as they have been with Libor.†His agency is one of the regulators examining practices in the foreign exchange markets, which are lightly regulated.
More than a dozen currency traders at some of the world’s largest banks, including Barclays, JPMorgan Chase and UBS, have been placed on leave over questions about whether they colluded to manipulate benchmark currency rates.
Deutsche Bank, the largest player in the currency trading market with a share of about 15.2 percent, and Citigroup have both fired employees as they conduct internal investigations in the matter.
Neither the banks nor any of the traders who have been suspended or fired have been accused of wrongdoing.
Against this backdrop, senior foreign exchange executives at several banks have decided to step down and pursue other interests in recent weeks.
