Banks Settle Forex Probe

The $3.4 billion settlement comes after years of investigation into Forex market manipulation.
4:03 | 11/12/14

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Transcript for Banks Settle Forex Probe
Okay. It's Wednesday November 12 the markets in New York are open are being never this morning 3.4 billion dollars which. Is total amount the five major banks agreed to pay US British and Swiss regulators. All settle allegations that they improperly manipulated foreign exchange for X markets. Now this coming from years of investigations and a number of whistle blowers shedding light on this conduct. It when I'm Dan Butler in New York so your details on another instance of wrongdoing and that financial markets. Gregg Greenberg on And Greg we don't mean to say that yes in fact this happens all the time but this one was pretty sizable. Yeah the foreign exchange market sees that five point three trillion dollars traded a cross and every day and it's not just. Day traders are high frequency traders these are companies and countries which are changing currencies nor do their business. Just like when you're terrorist you to a foreign country needed change your currency do business that's what's going on and it's a huge volume of trades so what exactly did the bank student how did they colluded inspire. Well some of the collusion was very esoteric. Via computers and and computer algorithms and it. Other things that they were doing was a simple collusion they go to electronic chat rooms and say let's team up on a trade when you read the transcripts which are available at the CFTC. It's quite appalling. So this was obviously a coordinated ever that was not merely an oversight. Non auto was a coordinated effort once again it when you read the transcripts about what these traders were doing and saying to assess saying to each other it's clear that its collusion it it's it's very scary when you consider that what goes on in the Forex market. It it really it matters to everyone whether it be the pricing of their mutual fund. Once again when they travel to a foreign country and they change their money. So what is an it perspective that 3.4 billion that's the settlement then but how does that compare to the actual revenue of these banks brought him. Some of these banks. Have revenue about 9000060000000050. Billion so it's really a drop in the bucket when they pay a few hundred million dollars and fine. In a clearly in the in the government does not want to get. Entangled in the big legal morass very similar to that Libor case when banks are fixing interest rates. So basically what happens is they get fine and averages moves on its it's quite saddening actually. Well that's I want to ask you about benefactor would we -- expected to see any kind of changes in behavior that because of the settlement. I don't think so the banks have gotten bigger since some financial crisis. And the trading has drawn more complex. So it's really hard tip to put anyone in jail until someone goes to jail the same behaviors is gonna crop up whether it be. In commodities or currencies. Or with regard to interest rates so as someone really needs to be punished severely because right now. The banks are bigger it's more complex and it's just so much harder to. To deter this kind of bad behavior and that something is actually done so where does the finger then get pointed to because a number of back executives were apparently ignoring. A lot of internal whistle blower emails about this. Look the emails are there it's not a very hard case for the government to make. Very some altered to libel are very similar to those toxic mortgages that the banks were selling its not a very hard. The case for the government to make and the government has the firepower Eric Holder the attorney general just didn't want to unleash it it's quite saddening I think Matt tight gets it right are up and Rolling Stone this week. Talking about they have witnesses who are saying in seeing with these banks are doing but the government's not going after and the government needs to do something whether B break up the banks or punish someone to deter this bad behavior yet because for a 3.4 billion dollars is obviously not step in a penalty for. Greg ring Greenberg from history dot com Greg thanks so much appreciate that. And of course you keep up with electric here on you've watched in the big number I'm down Butler and New York.

This transcript has been automatically generated and may not be 100% accurate.

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