Britain’s financial watchdog said it was unlikely to reach any conclusions this year in its probe into potential manipulation of foreign exchange markets.

Benchmark foreign exchange rates are used to set the value of trillions of dollars of investments and regulators are looking at whether traders at some of the world’s biggest banks colluded to manipulate the rates.

“I would be surprised if we got to conclusions within this year. I hope that we will next year,” Financial Conduct Authority chief executive Martin Wheatley told UK lawmakers yesterday.

“We are still in the investigation phase... The allegations are every bit as bad as they have been with Libor,” Wheatley added.

Banks including Barclays and UBS have been fined $6 billion for rigging Libor benchmark interest rates and some of the same banks are cooperating with regulators in the forex probe.

Wheatley said the foreign exchange market was different to Libor in that the forex rates were based on actual trades conducted in very liquid markets, while Libor is compiled by banks submitting their own quotes.

He said “the surprise for all of us” was that the allegations about fixing forex trades and the suggestion of collusion among traders have become so strong.

He accepted a point made by one lawmaker that given what’s emerging about the foreign exchange markets, people won’t trust how benchmarks are fixed.

Several lawmakers pressed Wheatley for reassurance that the Financial Conduct Authority was the lead regulator in the probe into foreign exchange markets being conducted by supervisors in the US and Switzerland as well.

Lawmakers have accused UK regulators of playing second fiddle to their US counterparts in the Libor probes.

Wheatley said there was no formal agreement on who was the lead regulator in a global forex probe but the FCA would be at the forefront.

“The activities happened in London and we have the lead position in terms of access to information and traders,” Wheatley said.