BSP to ensure proper conduct of market traders

The Bangko Sentral ng Pilipinas is committed to ensure market participants practice proper conduct, Governor Amando M. Tetangco Jr. said after reports surfaced last week of bankers involved in market manipulation.

“We want to make sure that there’s appropriate market conduct in the financial system and that rules and regulations, as well as market conventions, are strictly followed by market participants,” Tetangco said.

A newspaper reported late last week that two traders were fired from a universal bank for engaging in wash trades, which is basically buying and selling done by the same individual or firm. It is a form of market manipulation as it may prompt other parties in buying that position.

The central bank chief refused to comment on whether the BSP is conducting investigations on the reported firing of traders from one of the country’s largest banks.

However, he stressed that keeping the market participants compliant with rules is part of the responsibilities of the BSP and other regulators such as the Securities and Exchange Commission.

Promoting price and financial stability is the main objective of the central bank through various measures available to it.

Last week, news broke that six of the world’s largest banks were fined $5.8 billion for manipulating foreign exchange rates.

The US Department of Justice said last Wednesday Citi, JP Morgan, Barclays, RBS, UBS, and Bank of America were accused of conniving to fix the prices of US dollars and euros traded in the foreign exchange spot market.