Banks set aside over £4bn ahead of currency settlement

Some of the world's biggest banks have set aside up to $7bn (£4.38bn) in preparation for potential settlements with regulators investigating allegations of manipulation and collusion in foreign exchange markets.Upon releasing its earnings report on Monday, HSBC, Europe's largest bank, announced it was putting aside $378m ahead of a potential settlement with the Financial Conduct Authority (FCA), while Barclays and Royal Bank of Scotland (RBS) last week set aside $800m and $640m, respectively.Both provisions were specifically made for settlements related to the global FX investigation, which has been running for just over 12 months.The $7bn sum, which have been set aside by eight banks, including Deutsche Bank and Credit Suisse, will not entirely be used on currency-related issues, though analysts expect it to be the area where most of it will be spent.Six banks - RBS, Barclays, HSBC, UBS, JP Morgan and Citi - are currently negotiating a settlement, thought to be between £1.5bn and £2bn, with the FCA, wgich could come later this month.The bill could, however, be much higher as 10 other regulators around the world are also investigating and banks still face potential settlements with the US Department of Justice (DoJ) - which has previously proved it has the power and willingness to sanction hefty fines on banks guilty of financial misconduct.