The UK's Financial Conduct Authority has imposed a financial penalty of £284,432,000 on Barclays Bank for failing to control business practices in its foreign exchange (FX) business in London. This is part of a £1½ billion combined fine, most of it levied in the United States.

The Commodities Futures Trading Commission has fined the banking group $400 million (£257 million); the New York State Department of Financial Services has levied $485 million (£311 million); and the US Department of Justice has levied $710 million (£456 million). The failings occurred throughout Barclays’ London voice trading FX business, extending beyond G10 spot FX trading into EM spot FX trading, options and sales, undermining confidence in the UK financial system and putting its integrity at risk.

The FCA, rather unconvincingly in view of its refusal to punish any top-echelon bankers, has characterised this as another example of a firm allowing unacceptable practices to flourish on the trading floor. Instead of addressing the obvious risks associated with its business, Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients. It says that Barclays’ failure to control its FX business is particularly serious because of the effect it might have on the systemically important spot FX market. It is calling on firms to scrutinise their own systems and cultures to ensure that they make good on their promises to mend their ways.

Barclays was held to have strayed from FCA 'principle for business' 3, on the subject of management and control, which states rather vaguely that a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

Barclays and other firms are already participating in an industry-wide remediation programme to ensure that they address the root causes of the failings in their FX businesses. As part of that, the group's senior managers there and at the other firms are to "take responsibility for delivering the necessary changes," but not in a way that results in prosecution, hefty personal fines or cancelled bonuses. The shareholders, but not the managers, of Barclays, the Royal Bank of Scotland, JPMorgan Chase , UBS and Citigroup have collectively had to pay almost £4 billion for manipulating foreign exchange rates. Many critics of the Anglo-American governments' approach to such misdeeds argue that fines such as these are among the best investments the banks have ever made as they do not equal the gains that they have made from their misconduct.