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Fallout Continues After Swiss Rout

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Fallout Continues After Swiss Rout – Profit & Loss (free story)
The fallout from events on Thursday when the Swiss National Bank unexpectedly removed the Swiss franc’s peg to the euro has continued over the weekend with some estimating industry losses exceed $2 billion from the sharp move higher in the CHF. Whilst the focus has largely been on the retail FX market with brokers collapsing or requiring rescue, hedge funds and banks have also been hit hard.

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Swiss National Bank Abandons Currency Ceiling

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Swiss National Bank Abandons Currency Ceiling – Financial Times(subscription)
Switzerland’s central bank is discontinuing its currency “ceiling” of CHF 1.2 per euro, introduced in the middle of the eurozone crisis, and has significantly lowered interest rates to -0.75%.

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FXCM Reports $225 Million Hit; Fears for Retail Sector After SNB Move – Profit & Loss

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FXCM Reports $225 Million Hit; Fears for Retail Sector After SNB Move – Profit & Loss (subscription) The unprecedented move in CHF that followed the Swiss National Bank’s decision to abandon the euro peg has raised fears of a series of bankruptcies in the hedge fund and small institutional community, as well as pressured several retail brokers. FXCM has stated that its clients suffered “heavy losses” in the move and that the firm was owed $225 million and “could be” in breach of some regulatory capital requirements.

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European Banks Face $52 Billion in Litigation Costs: Morgan Stanley – Reuters

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European Banks Face $52 Billion in Litigation Costs: Morgan Stanley – Reuters
Royal Bank of Scotland and Barclays may have to pay some of the biggest bills from an estimated $52 billion in fines and other litigation costs facing Europe’s banks in the next two years, Morgan Stanley analysts said. European banks have paid out about $104 billion so far and the $52 billion they still have to pay, much of it related to foreign exchange trading, could restrain how much they pay in dividends.

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EU Lawmakers Eye Compromise for US on Benchmarks – Reuters

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EU Lawmakers Eye Compromise for US on Benchmarks – Reuters

European Union lawmakers look set to ease the international impact of rules to stop market benchmarks being rigged, addressing US concerns that global investors could lose out. The bloc is approving a law to directly regulate benchmarks such as those based on currencies and interest rates that banks have been fined billions of dollars for attempting to manipulate.
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JP Morgan Settles Currency Manipulation Lawsuit in US

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JP Morgan Settles Currency Manipulation Lawsuit in US – Reuters
JP Morgan has become the first bank to settle a US antitrust lawsuit in which investors accused 12 major banks of rigging prices in the foreign exchange market. The largest US bank will pay about $100 million, a person familiar with the matter said. Lawyers for the bank and the investors said a settlement had been reached in a letter filed on Monday with the US District Court in Manhattan.

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