Among the banks under scrutiny by the Department of Justice (DoJ) are Nomura, Crédit Agricole and Credit Suisse,with the London-based traders at each institution having been put on leave until investigations are finished. A trader at Bank of America is also being investigated.
The DoJ's actions come as part of a broader study of possible market manipulation following a high number of fines from Wall Street banks found guilty of fixing the Libor rate and foreign exchange markets.
Central to investigations is the concern that traders at certain banks may have used online chat rooms to communicate in secret to rig prices in the supranational, sub-sovereign and agency debt markets.
The SSA market has become smaller for four years running; according to Dealogic it now stands at $1.48tn. SSA issuance may still represent a large portion of global debt capital markets, but banks make far smaller gains on the deals than from other fixed income underwriting jobs.
Dealogic research finds that, as of 2010, the spread relative to benchmark has on average been at 44 basis points for SSA trades worldwide. On the other hand, in investment grade corporate bonds, the spread has averaged out at 152 basis points.
The UK's Financial Conduct Authority (FCA) has been on hand to the DoJ, helping to study the issues but stopping short of starting a full independent investigation.
According to figures central to the inquiry, procedures are in the early stages, and at least one of the banks concerned has not yet been officially approached or detailed by the DoJ.