The Serious Fraud Office (SFO) is preparing to launch a criminal investigation into manipulation of the foreign exchange market (forex) in the UK, the FT reports.
The news comes following several months of intelligence gathering by the SFO, and although it would not confirm or deny the existence of the investigation, it is thought that the UK's main anti-fraud agency might formally announce the probe before the end of the month.
The timing of the announcement is likely to be linked to approval by the UK Treasury for additional resources: according to insiders, these would be required for the investigation to go ahead.
The agency's current annual budget is £36m, which is considerably less than £52m in 2008. However, there is ring-fenced funding which it can apply for as long as the probe is forecast to use up more than 10 per cent of the agency's annual budget.
In terms of size and cost, it is thought that the probe would be similar to the existing investigation into rigging of the London Interbank Offered Rate (Libor). Indeed, it was this investigation that instigated initial inquiries into other benchmarks such as forex.
It could also lead to fines being handed out to banks in the same that they were in the midst of the Libor investigation. Banks and inter-dealer brokers have already paid out more than $6.5bn because of Libor.