But even her boss expected that timetable to slip.

Martin Wheatley, the chief executive of Britain's Financial Conduct Authority (FCA), told Reuters on Wednesday that nailing the landmark settlement had been "touch and go" and therefore had "managed expectations" by publicly stating that he only expected a conclusion in 2015.

McDermott, head of the FCA's enforcement and financial crime division, proved correct in her prediction earlier on Wednesday, levying a record $1.4 billion (886.75 million pounds) of fines on five banks, Citigroup (>> Citigroup Inc), UBS (>> UBS AG), HSBC, Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) and JPMorgan (>> JPMorgan Chase & Co.), for failing to stop their traders trying to rig foreign exchange prices from 2008 to 2013.

U.S. regulators the Commodity Futures Trading Commission and the Office of the Comptroller of the Currency, along with Switzerland's FINMA, also imposed penalties, taking the total bill for the five banks plus Bank of America (>> Bank of America Corp) to $4.3 billion.

The FCA formally launched its investigation, dubbed 'Operation Dovercourt', in October last year.

McDermott was initially unsure how many banks or other regulators would join, but knew it might suit banks keen to avoid the kind of first mover disadvantage suffered by Barclays (>> Barclays PLC) when the British bank settled ahead of other banks in 2012 over allegations of Libor interest rate rigging, only to find itself at the centre of the ensuing public furore.

Ironically Barclays' board decided to pull out of the foreign exchange group settlement just hours before it was announced, over concerns that the deal could affect a separate investigation into forex trading by the New York regulator, the Department of Financial Services.

OUTSOURCING DOVERCOURT

The FCA had identified what it considered to be the six worst offending banks and sounded them out in July and August about a potential group settlement.

Then, in the week of Sept. 22 the FCA formally visited all six to tell them what their fines would be, people familiar with the matter said.

They had until Nov. 7 to respond, and a settlement was earmarked for the following week. That also put down a marker for overseas regulators to coordinate their action with London, the centre of 40 percent of foreign exchange trading, the world's biggest financial market.

The CFTC and FINMA coordinated their penalty announcements just days before the FCA went to press at 0600 GMT on Wednesday.

Banks have spent tens of millions of pounds each on the investigation, as the FCA effectively "outsourced" much of the forensic work to bank staff and external lawyers -- despite having a team of 70 of its own employees working on the case.

To silence critics who accused the watchdog of effectively allowing the industry to run its own investigation, the FCA says it gave banks detailed directions on the data it wanted, including key words to search for in email and chatroom conversations, and also asked banks to conduct interviews.

Some banks also said they started internal investigations into their foreign exchange trading desks around June 2013.

RBS said clients complained about currency trading practices in 2010 and 2012, and a trader raised further concerns in 2011. RBS Chairman Philip Hampton said on Wednesday he regretted the bank did not act quicker to investigate.

(Additional reporting by Jamie McGeever and Matt Scuffham; Editing by Greg Mahlich)

By Steve Slater and Kirstin Ridley