FX fines undermine validity of bank-provided financial rates
Convenience and low cost have always been the prime motives for customers to use bank-provided benchmarks in their portfolio analytics. That user model, shaken by the Libor scandal, now seems upside down after US, UK and Swiss regulators fined 5 major banks more than US$3 billion for rigging FX rates in London. Going forward, bottom-up benchmarks based on customer reported activity may displace the banks' own rate reporting.