Hold the presses! Banks agree not to lie, cheat, or steal

Following episodes where traders at large banks were sharing information about their clients’ positions in various currency trades, resulting in fines of more than $4 billion, the Federal Reserve Bank of New York and several other central banks agreed not to do that anymore.

Bankers Agree on Client-Data Protections,” Wall Street Journal, March 26, 2015 C4. An eight-page agreement  says foreign exchange traders should not share more information than necessary to effectuate the trade, and they should not pass along information they know or suspect is misleading.

What does it say about an industry culture where such an agreement is necessary?  And who is going to establish regulations and who is going to enforce this in multiple countries?  I guess it’s better than the banks using their clients’ information to trade on the bank’s account.  Or can they do that?  Whose information is it, anyway?

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Filed under Compliance, Culture, Governance, Investor relations, Oversight, Protect, Use

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