(Adds comment from banking FX body)
By Patrick Graham
LONDON, May 11 (Reuters) - The Bank for InternationalSettlements (BIS) has set up a working group aimed at creating asingle global code of conduct for the foreign exchange market,the central banks' central bank said on Monday.
The group will be headed by Reserve Bank of AustraliaAssistant Governor Guy Debelle, the co-author of recommendationsdrawn up last year for reforming "fixing" benchmarks after twoyears of scandal over their alleged manipulation.
Reuters reported last week that a number of senior centralbank officials were for the first time optimistic about unifyingthe disparate codes of conduct used in different jurisdictionsinto one central document.
They say that the need to show the industry is taking actionto prevent future abuses could override traditional divisionsbetween the biggest banks and market centres such as Tokyo,London and New York in a market that has never been formallyregulated.
James Kemp, Managing Director for Global FX at the GlobalFinancial Markets Association (GFMA), welcomed the BIS move andsaid there is a very strong desire for coordinated alignment ofregional codes.
"This is an opportunity for market participants to work withregulators and supervisors to demonstrate that they can put theright controls and guidance in place," he said in a statement."As demonstrated by various initiatives already under way, theGFMA's FX Division is highly supportive of this initiative."
The push for a single set of standards is likely to beshaped by Britain's Fair and Effective Markets Review of conductin currency and other markets, which is due to report in Juneand will need international backing to have any global impact.
All of that work, central to efforts to get past two yearsof scandal that many participants say has throttled activity andprofits in one of the banking sector's biggest cash cows, ishappening as further fines are set to emerge.
People familiar with the matter have told Reuters that U.S.authorities are on course to reach multibillion-dollaragreements with five large banks over allegations of FX marketrigging as soon as this week.
Barclays, one of the top three players in the $5trillion a day global currency market, is also likely to settleseparate investigations by Britain's Financial Conduct Authorityand the U.S. Commodity Futures Trading Commission at the sametime as it completes the Justice Department deal, a personfamiliar with the matter told Reuters.
RBS and Barclays last month set aside a further$1.71 billion for investigations and litigation involvingforeign exchange. (Editing by David Goodman)