NEW YORK, July 14 (Reuters) - Those who trade in the global foreign-exchange market must step up and help regulators restore fairness and public trust after a string of investigations and settlements related to rigging, a top Federal Reserve Bank of New York official said on Tuesday.
Simon Potter, head of market operations at the New York Fed, also said the emergence over the years of high-frequency electronic trading raises questions over fairness, liquidity, and the quality of prices in the currency market.
In a speech reinforcing warnings from other frustrated supervisors, he called for better coordination, clearer global standards, and a willingness of banks and other traders to regain public trust in the $4.7 trillion daily forex market.
"Further work is required both to strengthen best practices at a global level and to promote greater adherence to those practices," Potter said in prepared remarks to a conference that was closed to the press.
"Market participants have either not been aware of existing best practices guidance or have made the conscious decision to violate such guidance in the hopes of making a short-term gain," he said.
Governments in Europe, the United States and Japan have recently targeted currency trading in probes alleging that banks prioritized the execution of their own trades at the expense of client orders, taking advantage of the fact that those deals often take place away from exchanges.
"The behaviors that triggered these criminal and regulatory actions illustrate that, for many, self-interest and the lure of near-term gains were put above the preservation of the market's integrity and long-term sustainability," Potter said. (Reporting by Jonathan Spicer; Editing by Paul Simao)