Michael Nathaniel Davis

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What is benchmark manipulation in forex and what are the consequences?

Benchmark manipulation involves colluding to influence key reference rates, like the WM/Reuters 4 p.m. London fix. In past scandals, banks were fined billions for coordinating trades to nudge benchmark levels, impacting trillions in contracts. Benefits for manipulators: profits on benchmark-linked products. Risks: massive fines, reputational damage, and criminal charges. Institutions now enforce stricter oversight, rotating staff, and compliance monitoring at fix times. For retail traders, awareness of fix periods is key—spikes around 4 p.m. London may reflect institutional benchmark flows. Benchmark scandals prove even top-tier institutions can cross ethical lines.