Investments  

Morning papers: New front opened in global forex probe

A US regulator has opened a new front in the unfolding probe into alleged manipulation of global foreign exchange benchmarks just two days after the fixing investigation was likened to the Libor scandal by the UK’s conduct watchdog, the Financial Times reports.

New York’s top banking regulator, the Department of Financial Services, has demanded documents from more than a dozen banks, including Deutsche Bank, Goldman Sachs, Lloyds, Royal Bank of Scotland and Standard Chartered.

All of the banks declined to comment on whether they had been contacted.

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According to the FT, a Buenos Aires-based Deutsche Bank trader has left the bank in relation to the probe, while a further three bankers have previously been fired. This takes the tally of bankers suspended, placed on leave or fired across nine banks to 21.

Goldman Sachs and Citigroup have also seperately announced the departure of three veteran currency traders. Both banks declined to comment and there is no evidence to suggest the exits are linked to the ongoing investigation.

Earlier this week Martin Wheatley, Financial Conduct Authority chief executive, told the Treasury Select Committee that allegations traders had conspired to manipulate the foreign exchange market were “every bit as bad as they have been with Libor”, which has so far led to $6bn in fines.

Pension relief cuts to middle classes ‘unfair’

Plans to hammer the middle classes with a raid on their pensions were branded ‘unfair’ in a devastating analysis by Britain’s most respected tax watchdog, the Daily Mail reports.

The Institute for Fiscal Studies said cutting tax relief on pension contributions for millions of workers is frequently proposed by politicians hoping to raise cash to fund pet projects. But it warned that such a move would be ‘complex, unfair and inefficient’ and put off prudent workers saving for retirement.

Anglo Irish trial begins with focus on €625m in loans to individuals

Loans amounting to €625m made by Anglo Irish Bank to a group of wealthy individuals in 2008 “broke Irish company law”, the Financial Times reports a court has been told.

Three former executives of Anglo, which collapsed in 2008 despite receiving some €30bn of taxpayer money, are on trial on charges connected to loans that the bank made to buy its own shares at the height of the global financial crisis.

“There is no doubt that this lending was not in the normal course of the bank’s business but was lending in very extraordinary circumstances,” Paul O’Higgins, counsel for the prosecution, told a 15-member jury.

Eurozone slides closer to Japan-style deflation trap

The balance sheet of the European Central Bank has fallen by €553bn over the past year as banks repay money that they no longer want, the Daily Telegraph warns.

This is “passive tightening” or “endogenous tapering”, the newspaper warns. The ECB balance sheet has plummeted to 23 per cent of eurozone GDP from a peak of 32 per cent in July 2012.

Europe firm ahead of policy updates

Global stocks are inching higher, while government bond prices nudge lower, as traders absorb a bumper batch of corporate earnings and await monetary policy updates out of Europe, the Financial Times reports.