JP Morgan and Citigroup each boosted their legal expenses to about $1 billion for the third quarter, foreshadowing a possible settlement into far-reaching investigations into the inner workings of the vast foreign-exchange markets.

JP Morgan's chief financial officer, Marianne Lake, said on a call Tuesday morning to discuss the bank's quarterly earnings that legal expenses "did include our best estimate at this point related to FX. Things have further progressed this quarter than they were last quarter."