May 29, 2015
...A story last week (click here) reported that four of the world's largest banks - Royal Bank of Scotland, Barclays, JP Morgan Chase and Citigroup - admitted currency collusion and manipulation and were fined a total $US5 billion. That's a big fine, but it was a big crime.
The fine could quite possibly be pocket change compared to the profits made by these banks who, on an almost daily basis for five years, colluded via a private chat room to manipulate currency markets for their trading benefit, harming countless consumers in the process.
How worried should investors be about potential market manipulation and what can we do about it? If big entities like banks can get away with it for years, how can we protect ourselves from being on the wrong side of a transaction?
Without being glib, I think investors have to accept, to some
extent, market manipulation comes with the territory. I'm not talking
about rogue traders and unscrupulous individuals who, through their talk
and actions, move prices in their favour. Fortunately, they tend to be
few and far between and are increasingly nailed by vigilant regulators....
The facts are obvious, the CEOs of the world's largest banks think nothing of their illegal activities when fines are the only penalty. There is no way to stop the abuse. Citibank recently rounded up all it's buddies to force through an amendment to the USA budget that supports exotic financial instruments with tax deductions.
There is no stopping their insult to the American financial infrastructure. Glass-Steagall has to be reinstated. The banking industry has to be regulated because the brevity of USA law evades them. According to the actions of the USA, the country's treasury receives part of the illegal monies and is on the dole.
Why would any of these CEOs view their activities as detrimental when they are justified as the USA Treasury sits in the center of the actions?
The law of the USA has to be clear to all financial institutes that if they conduct risky investments while taking tax deductions the CEOs not only go to prison, they are broken up into far smaller banks. How small? Until it stops and there is no huge buffer of monies that can be paid by the bank's CEO. The deposits of any bank should not be so large it provides a vehicle to ignore the law.
...A story last week (click here) reported that four of the world's largest banks - Royal Bank of Scotland, Barclays, JP Morgan Chase and Citigroup - admitted currency collusion and manipulation and were fined a total $US5 billion. That's a big fine, but it was a big crime.
The fine could quite possibly be pocket change compared to the profits made by these banks who, on an almost daily basis for five years, colluded via a private chat room to manipulate currency markets for their trading benefit, harming countless consumers in the process.
How worried should investors be about potential market manipulation and what can we do about it? If big entities like banks can get away with it for years, how can we protect ourselves from being on the wrong side of a transaction?
The facts are obvious, the CEOs of the world's largest banks think nothing of their illegal activities when fines are the only penalty. There is no way to stop the abuse. Citibank recently rounded up all it's buddies to force through an amendment to the USA budget that supports exotic financial instruments with tax deductions.
There is no stopping their insult to the American financial infrastructure. Glass-Steagall has to be reinstated. The banking industry has to be regulated because the brevity of USA law evades them. According to the actions of the USA, the country's treasury receives part of the illegal monies and is on the dole.
Why would any of these CEOs view their activities as detrimental when they are justified as the USA Treasury sits in the center of the actions?
The law of the USA has to be clear to all financial institutes that if they conduct risky investments while taking tax deductions the CEOs not only go to prison, they are broken up into far smaller banks. How small? Until it stops and there is no huge buffer of monies that can be paid by the bank's CEO. The deposits of any bank should not be so large it provides a vehicle to ignore the law.
