Barclays set to pay $100m fine to settle with New York regulator

Barclays is all set to pay a fine of at least $100m to the New York Department of Financial Services to settle allegations that it abused foreign exchange markets through its electronic trading platform.

The British bank had earlier this month agreed to pay $120m (£79m, €113m) to settle private litigation in the US accusing it of conspiring with rivals to rig Libor, a benchmark interest rate. The looming penalty comes as a forex probe by US agencies has expanded to include new claims against Deutsche Bank.

This is not the first time that Barclays has been fined by US regulators. In May, it agreed to pay New York's banking regulator a fine of $485m over manipulation of forex spot trading, according to The Financial Times.

The latest fine payable by Barclays is less than the one it paid in May, mainly because of lower trade volume. However, repeated malpractice could be considered serious as it is alleged that the bank, through its trading platform, intentionally sought to gain unfair advantage over clients and counter-parties.

According to Moody's, total litigation costs faced by banks since the 2008 financial crisis nears $219bn, a majority of which paid by US banks led by Bank of America. The ratings agency said the pain of heavy fines was now shifting to European banks.

David Fanger, Moody's senior vice-president, said: "At this point, probably, European banks are more vulnerable because US banks have [already] taken more of the provisions."

One of the highlights of the New York probe is Barclays's "last look", a system for backing out of trades at the last minute if the market moves against the bank.

Since the 2008 financial crisis, Barclays has set aside $13bn towards penalties and litigation. The bank's new CEO Jes Staley and chairman John McFarlane aim to settle the remaining legal issues as quickly as possible.