Morning papers: Wheatley says forex fixing on par with Libor

A worldwide investigation into the manipulation of foreign exchange rates is producing allegations as serious as those in the London interbank offered rate (Libor) rigging probe, the Financial Times reports.

Speaking to the Treasury Select Committee yesterday (4 February), Financial Conduct Authority chief executive Martin Wheatley said allegations traders had conspired to manipulate the foreign exchange market were “every bit as bad as they have been with Libor”.

The Financial Times reports that the forex fixing investigation has prompted at least 15 banks to co-operate with regulators in London, Europe and the US or to conduct their own internal probes.

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As previously reported by FTAdviser, during the session Mr Wheatley was also forced to defend the Retail Distribution Review, facing accusations that the rules have cost £3bn, created “commission bias lag” and stifled innovation.

House price boom to last for decade

Chancellor George Osborne has warned the housing shortage fuelining a continuing rise in house prices could persist for another decade, the Daily Mail reports.

According to the paper, Mr Osborne said that demand will remain problematic until at least 2024 despite government efforts to boost supply. However, he defended the Help to Buy scheme which some believe is behind an 11 per cent spike in London house prices.

Emerging markets vulnerable to Fed tightening

Emerging markets could be more vulnerable than ever to an interest rate shock resulting from the US Federal Reserve’s tapering plan, the Telegraph reports.

The paper says the Bank for International Settlements has warned there had been a “massive expansion” in borrowing on global bond markets by banks and companies in developing countries, which means they could be exposed to risks as borrowing costs rise in the developed world.

Morgan Stanley restates its earnings after $1.3bn settlement

Morgan Stanley has had to restate its earnings figures for the fourth quarter of last year after it agreed a $1.3bn settlement (£796.7m) with a US regulator over its sale of $11bn worth of mortgage-backed securities to Fannie Mae and Freddie Mac, the Financial Times reports.

According to the paper, the bank was forced to cut its Q4 earnings per share from 7 cents to 2 cents after it reached a deal with the Federal Housing Finance Agency.

Benefits claimants face payout delays

Seriously disabled people and those with health conditions are facing weeks without financial support from the government following changes to the way benefits are assessed, the Independent reports.

According to the paper, new rules introduced by the Department for Work and Pensions last year mean anyone who wants to appeal a decision that they are fit to work must have their paperwork looked at again, while receiving no benefits.

The paper reports that the Citizens Advice Bureau warned this will result in thousands of people being forced to survive on no income.