WELLINGTON: New Zealand's Commerce Commission said on Monday that its recent investigation of banks in New Zealand was related to the possibility of foreign exchange rate manipulation.
Joining a growing list of countries which are looking into alleged misconduct in the $5.3 trillion a day FX market, the commission said that it had begun the investigation after the issue was raised by a market participant.
"The Commerce Commission has confirmed that it has an investigation into possible manipulation of currency rates and possible influencing of benchmarks in foreign exchange markets," the commission said in a statement.
"The investigation was commenced as a result of a leniency application under the Commission's cartel leniency policy."
Last week, the commission would only said there was an investigation, but did not provide details.
Authorities in Australia and Hong Kong are also looking into possible currency manipulation in the region, widening the scope of investigations which began in Europe and the United States into alleged manipulation of the daily benchmark fixing of currency rates in London.
Authorities are looking at whether traders from different banks worked together to influence currency prices and if they traded ahead of their own customers or failed to accurately represent to customers how they were determining the prices.
Last week, Reuters reported a source saying that Deutsche Bank AG, the world's largest foreign exchange bank, had placed one of its FX sales directors on leave, while the bank has said it was cooperating with the investigation.
Swiss authorities have said they are investigating JPMorgan Chase and Co, Citigroup Inc and UK bank Barclays PLC, while Swiss bank UBS AG last month said it had suspended some currency traders in the United States, Zurich and Singapore.
Among foreign banks registered in New Zealand are Bank of Tokyo Mitsubishi UFJ, Citi and JPMorgan, Deutsche Bank and UK bank HSBC Holdings.
UBS operates a subsidiary in the country.
Meanwhile, Australia New Zealand Bank, Auckland Savings Bank, Bank of New Zealand and Westpac, the country's four main banks which are all Australian-owned, said that they had not been contacted by the commission.
Deutsche, JPMorgan, HSBC and UBS have declined to comment on the issue, while Citi could not be reached for comment on Monday.
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