Where next for FX claims, asks Simon Duncan
For many litigators, news that several of the world’s largest banks had been found guilty of manipulating the foreign exchange rates by the Financial Conduct Authority (FCA) was thought likely to lead to a new rash of claims against those banks. Progress however, appears to have been slow.
Hurdles
In terms of the legal issues, a parallel can be drawn with claims against banks for interest rate swaps mis-selling. Many of the same legal issues arise. However, on a practical level any successful FX claim needs to get over the following additional hurdles:
Take any currency pair, sterling/dollar at 1.6044 for example (one pound buys 1.6044 dollars). A manufacturer in England selling goods to America receives payment in dollars. He buys sterling from his bank in England with those dollars. If we ignore the bid/offer spread, a million dollars buys £623,285.96 at that exchange rate.
It is alleged that the sterling/dollar rate has been manipulated, say from 1.6044 to 1.6088. This would mean that the manufacturer receives £621,581.30 for his million dollars.
If the rate was 1.6000 then
