Power of Story
Send a Tweet        
- Advertisement -

Share on Google Plus 1 Share on Twitter 1 Share on Facebook 3 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (5 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   3 comments
General News

Major Banks Prepare to Pay Billions For Foreign Exchange Manipulation

By       Message Corp Watch     Permalink
      (Page 1 of 2 pages)
Related Topic(s): ; ; ; ; ; , Add Tags Add to My Group(s)

Well Said 1   News 1   Supported 1  
View Ratings | Rate It

opednews.com Headlined to H2 11/2/14

- Advertisement -


Photo: Don Harder. Used under Creative Commons license
(Image by Corpwatch)
  Permission   Details   DMCA
- Advertisement -

Reprinted from www.corpwatch.org

Major Banks Prepare to Pay Billions For Foreign Exchange Manipulation

by Richard Smallteacher, CorpWatch Blog

Multinational banks are preparing to pay out billions of dollars in fines to settle charges of foreign exchange manipulation. Some 19 investigations in ten different legal jurisdictions are now winding their way to completion and analysts says the final tally may hit $41 billion.

The first set of settlements are likely to emerge in November in response to an investigation by the Financial Conduct Authority (FCA) in the UK, which has notified six banks that it wants to come to an agreement for them to pay out 1.5 billion ($2.5 billion)

- Advertisement -
"The discussion around a potential U.K. settlement as well as certain U.S. banks taking related provisions in their recent results suggests a kick-start towards overall FX (foreign exchange) litigation settlement," Kinner Lakhani of Citibank told Bloomberg. (His team came up with the estimate of $41 billion in a research report published last week)

These six banks number among a total of 15 that are being investigated for rigging the $5.3 trillion global market. Just four of the 15 together control over half the foreign-exchange market, according to Euromoney, an industry publication. Barclays of the UK has 10.2 percent of the market, Citigroup in the U.S. has 14.9 percent, Deutsche Bank from Germany has a 15.2 percent share while UBS of Switzerland has 10.1 percent.

Some 30 traders at these banks have been suspended to date over the last year, although some have since been allowed to return to work. A lawsuit filed earlier this year named a group that took part in an electronic chat room dubbed "The Cartel" -- one of many where traders would collude on fixing prices to increase profits. (Other chat rooms had names like "The Bandits' Club," "One Team, One Dream" and "The Mafia.")

Members of the "Cartel" named in the lawsuit included Chris Ashton and Matt Gardiner of Barclays, Rohan Ramchandani of Citigroup, Richard Usher from JPMorgan and Niall O'Riordan of UBS, all of whom worked in London, where 40 percent of global foreign exchange trading takes place.

To date UBS of Switzerland has had more employees suspended than any of the others. Seven traders have been suspended from UBS offices in London, New York, Singapore and Zurich.

Experts say part of the problem is the lack of proper regulation of foreign exchange markets."This is a market that is far more amenable to collusive practices than it is to competitive practices," Andre Spicer, a professor at the Cass Business School in London, told Bloomberg News.

Regulators have tried to defend themselves. "I have never come across myself in any of these meetings or discussions specific allegations of people rigging the market ... in particular, the allegations now about the dealers themselves colluding to rig markets," Paul Fisher, former head of foreign exchange at the Bank of England told the British Parliament earlier this year. "It would be very odd for them to have come to one of these meetings and said: 'We've been rigging the markets, what do you think?'

- Advertisement -
Recently the regulators have gone into overdrive. Some 19 different probes are being conducted by a slew of agencies from around the world including the Australian Securities & Investments Commission, the European Commission, Bafin in Germany, Hong Kong Monetary Authority, the Japan Financial Services Agency, the Commerce Commission in New Zealand, the Monetary Authority of Singapore, Finma in Switzerland, the Commodity Futures Trading Commission and the Department of Justice in the U.S.

The banks have already started to warn their shareholders of the size of the fines. In mid-October, JP MorganChase was effectively the first to announce that it was going to need to spend as much as $1 billion in legal costs over the next year, much of which is expected to stem from the foreign exchange scandal. (In July, UBS of Switzerland set aside $2.08 billion for future legal costs, although those provisions were related to a much wider variety of investigations.)

Other banks followed suit this week. On Thursday, Barclays Bank of the UK announced that it was setting aside $780 million to pay the fines, followed by Citibank from the U.S. with $600 million. On Friday Royal Bank of Scotland announced a $640 million provision and HSBC of the UK is expected to announce it will set aside $640 million on Monday.

The foreign exchange trading scandal has come on the heels of the global interest setting scandal for which a number of the very same banks have had to pay out a total of $5.8 billion in fines to date.

Next Page  1  |  2

 

- Advertisement -

Well Said 1   News 1   Supported 1  
View Ratings | Rate It

http://www.corpwatch.org/index.php

CorpWatch: Non-profit investigative research and journalism to expose corporate malfeasance and to advocate for multinational corporate accountability and transparency. We work to foster global justice, independent media activism and democratic control over corporations.

We seek to expose multinational corporations that profit from war, fraud, environmental, human rights and other abuses, and to provide critical information to foster a more informed public and an effective democracy.

Click here for our 2010-2011 Combined Report
Click here for our 2007-2009 Combined Report
Click here for our 2006 Annual Report
Click here for our 2005 Annual report
Click here for our 2004 Annual report

Our guiding vision is to promote human, environmental, social and worker rights at the local, national and global levels by making corporate practices more transparent and holding corporations accountable for their actions.

As independent investigative researchers and journalists, we provide critical information to foster a more informed public and an effective democracy.

We believe the actions, decisions, and policies undertaken and pursued by private corporations have very real impact on public life -- from individuals to communities around the world. Yet few mechanisms currently exist to hold them accountable for those actions. As a result, it falls to the public sphere to protect the public interest.

In many cases, corporate power and influence eclipses even the democratic
political process itself as they exert disproportional influence on public policy they deem detrimental to their narrow self-interests. In less developed nations, they usurp authority altogether, often purchasing government complicity for unfair practices at the expense of economic, environmental, human, labor and social rights. 

Yet despite the very public impact of their actions and decisions, corporations remain bound to be accountable solely to their own private financial considerations and the interests of their shareholders. They have little incentive, nor requirement, for public transparency regarding their decisions and practices, let alone concrete accountability for their ultimate impact.



Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

U.S. Air Force Hires Private Companies To Fly Drones In War Zones

Boeing Helps Kill Proposed Law to Regulate Drones

Coca-Cola Forced To Shut Bottling Plant in India

H&M Responds Slowly to Bangladesh Factory Collapse Killing 1,100

ACLU Reveals FBI Hacking Contractors

CorpWatch : Commodity Scams: Barclays, Goldman & JP Morgan Under Fire