'If you ain't cheatin, you ain't trying'

 Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn). Four of the banks - JPMorgan, Barclays, Citigroup and RBS - have agreed to plead guilty to US criminal charges The fifth, UBS, will plead guilty to rigging benchmark interest rates.

Regulators said that between 2008 and 2012, several traders formed a cartel and used chat rooms to manipulate prices in their favour. US Attorney General Loretta Lynch said that "almost every day" for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates. Their actions harmed "countless consumers, investors and institutions around the world", she said. Several strategies were used to manipulate prices and a common scheme was to influence prices around the daily fixing of currency levels. A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities.

In a scheme known as "building ammo", a single trader would amass a large position in a currency and, just before or during the fix, would exit that position. Other members of the cartel would be aware of the plan and would be able to profit. "They engaged in a brazen 'heads I win, tails you lose' scheme to rip off their clients," said New York State superintendent of financial services Benjamin Lawsky.

“This sort of practice strikes at the heart of business ethics and is yet another blow to the integrity of the banks. Our pension funds invest billions of pounds in the financial markets and if they are being cheated in this way, it affects every one of us,” said Mark Taylor, dean of Warwick Business School and a former foreign exchange trader. 

Yet the fines are "much lower than expected," said Chirantan Barua, an analyst at Bernstein Research in London. "No retroactive massive Libor fine for Barclays is a big positive, as is no reopening of the NPA (non-prosecution agreement). "The fine came in £270m better than we expected for RBS, £850m better in the case of Barclays," he said. Barclays had already set aside around £2 billion to cover a possible settlement with global regulators.

Peter Hahn, a senior lecturer at the Cass Business School, told the BBC that he doesn’t know anyone who has stopped doing business with a bank based on how much they are fined.

“If I get hit by a bus, I don’t want London Transport to be held responsible, I want the driver to be held responsible,” Hahn said.

He said that victims are unlikely to get any compensation for the bank’s behaviour, despite the huge sums they are paying to authorities. “I could have got a bad exchange rate on my credit card when I went on holiday to Europe. If my pension fund owns shares in this bank, I lose again. Do I get any of the settlement? Who gets it? Who’s responsible?” he said.