By Mark Kleinman, City Editor
Some of the world's biggest banks are resisting details of plans being drawn up by the City regulator to fine them for failings in their foreign currency operations.
Sky News has learned that a number of the six banks in talks with the Financial Conduct Authority (FCA) about a settlement are angry that the spread between the biggest and smallest penalties is in the low tens of millions of pounds.
They are understood to have expressed concern that there will be little distinction between the six in terms of reputational damage despite the fact that the scale of misconduct is understood to have varied markedly between them.
Sources indicated on Thursday that the FCA fines, which could be announced as soon as this month, are likely to range from approximately £225m at the lower end to approximately £250m at the other extreme.
During talks with the six banks, Martin Wheatley, the FCA chief executive, is understood to have informed them that a large proportion of the fines is the result of misconduct by foreign currency traders having taken place after the Libor rate-rigging scandal was exposed in the summer of 2012.
"The FCA is arguing that all of the banks should have heeded the warning after Libor emerged as an issue, whether they were punished for manipulating [Libor] or not," said one source.
It was unclear how the six banks - Barclays, Citi, HSBC, JP Morgan, Royal Bank of Scotland and UBS - would be ranked by size of fines.
The final penalties have yet to be formally agreed and the numbers are still moving around, according to sources close to the discussions.
However, the aggregate FCA fine is now thought to be likely to be in the region of £1.4bn.
During the last 10 days, Barclays, HSBC and RBS have made provisions in their accounts worth just over £1.1bn as they brace for the regulatory settlements.
The provisions followed similar moves from Citigroup, UBS and JP Morgan, which came in the wake of talks held between the banks and the FCA in September.
The so-called omnibus settlement will be the largest collective penalty ever imposed by the City watchdog.
The FCA will find the banks guilty of a string of systems and control failures in their foreign exchange businesses, although the timetable for the settlement, which is partly dependent upon whether the banks settle simultaneously with US regulators, could yet slip.
The FCA and the banks declined to comment.
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