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By Steve Slater
LONDON, Nov 12 (Reuters) - Barclays did not join agroup settlement over the alleged manipulation of foreignexchange rates because of complications with its regulator inNew York, people familiar with the matter said.
London-based Barclays is regulated by the New York StateDepartment of Financial Services (DFS), unlike any of the otherfive banks who agreed a $3.4 billion settlement with British,U.S. and Swiss regulators on Wednesday.
Barclays had been expected to be part of the settlement withBritain's Financial Conduct Authority (FCA) and U.S. CommodityFutures Trading Commission (CFTC), but three people familiarwith the matter said it pulled out because of issues with itsregulation by New York's DFS, whose Superintendent BenjaminLawsky has aggressively pursued wrongdoers in recent years.
It was not clear if Lawsky's office blocked Barclays fromjoining the settlement or if the UK bank chose to pull out dueto fears it could lose its New York banking license if itadmitted wrongdoing.
The bank said it had "engaged constructively" with the FCAand CFTC and considered a settlement with them on terms similarto those agreed by other banks.
"However, after discussions with other regulators andauthorities, we have concluded that it is in the interests ofthe company to seek a more general coordinated settlement," itsaid in a statement. It declined further comment.
The five banks to settle with the FCA and CFTC were UBS, JPMorgan, Citigroup, Royal Bank ofScotland and HSBC.
Lawsky, who started his investigation into possiblemanipulation of currency markets in February, chose not tocoordinate a settlement with other regulators because he viewedthose deals as too weak, a person familiar with the regulatortold Reuters last week.
Lawsky grabbed headlines in 2012 when he threatened torevoke the license of Britain's Standard Chartered.
Bank regulation is fragmented in the United States, withstate and federal authorities responsible for differentactivities.
The New York DFS was created in 2011 and supervises foreignand wholesale banks and some other firms. It regulates 87branches of foreign banks, including Barclays, Deutsche Bank andBNP Paribas, but it does not regulate the U.S. arms ofHSBC, RBS or UBS. (Additional reporting by Katharina Bart in Zurich; Editing byDavid Holmes)
