A coalition of major transnational banks has been fined $420 million by the Financial Conduct Authority (FCA) for colluding to manipulate benchmark foreign exchange rates. Regulatory investigations revealed that spot-market traders from supposedly competing institutions utilized secure, invite-only chatrooms to coordinate their order flows. By synchronizing the execution of multi-billion-dollar currency transactions immediately prior to and during the daily "fixing window," the traders artificially inflated or deflated exchange rates to trigger automated client stop-loss orders and maximize their own trading desks' profits.
With reference to the extract above, explain what is meant by 'market rigging'.
21 exam-style questions on Edexcel A A Level Economics 4.4.1 Role of financial markets. Each one has a worked solution and a mark scheme showing where the marks go.