In a potential global financial scandal that could rank alongside the LIBOR-rigging disclosures that have led to huge fines, media reports said banks such as JP Morgan and Citigroup have become the latest banks to confirm they were working with regulators into probes on foreign exchange trading.

In a potential global financial scandal that could rank alongside the LIBOR-rigging disclosures that have led to huge fines, media reports said banks such as [tag|JP Morgan|]JP Morgan[/tag] and [tag|Citigroup|]Citigroup[/tag] have become the latest banks to confirm they were working with regulators into probes on foreign exchange trading.

This publication is in contact with Citigroup and JP Morgan about the reports; JP Morgan declined to comment. Citigroup had not responded at the time of going to press.

“These investigations are in the early stages and the firm is co-operating with the relevant authorities,” JP Morgan was quoted by the UK's Financial Times as saying in a quarterly filing. Barclays also confirmed it had suspended six foreign exchange traders, the report said. This publication has also contacted the UK-listed bank on the matter.

A number of large banks, such as UBS, Deutsche Bank and Royal Bank of Scotland confirmed they were working with regulators on investigations into the multi-trillion-dollar foreign exchange market.

The investigation will be a blow to banks that might have hoped that, after months of fines for LIBOR-rigging and other issues such as anti-money laundering violations, the wave of regulatory punishment might be coming to an end.

The FT said HSBC and Credit Suisse have also launched internal probes or received requests for information from regulators, according to people familiar with the situation.

Reuters, meanwhile, quoted Lars Christensen, co-chief executive of Denmark’s Saxo Bank as warning that the issue could be used as an excuse by politicians to impose tight regulations on the forex market, leading to over-regulation. He pointed out that the forex market is so large and liquid that it was hard to manipulate; it is also unclear on what basis the investigations had arisen.