Five Big Banks Plead Guilty to Rigging Currency Markets and No One Goes to Jail

Sounds like fraud, but if some administrative body decided fraud was legal, that really makes it so... And don't look at that small book governing your nation laws, it's irrelevant anyway.

Some examples of what these traders discussed in the chat rooms, from the Barclays consent order (https://s3.amazonaws.com/s3.documentcloud.org/documents/2084...)

Quote:

One particular chat room, referred to by the participating traders and other traders as the “Cartel” included FX traders from Citigroup, JP Morgan, UBS, RBS and Barclays who specialized in trading the Euro.

One Barclays FX trader, when he became the main Euro trader for Barclays in 2011, was desperate to be invited to join the Cartel because of the trading advantages from sharing information with the other main traders of the Euro. After extensive discussion of whether or not this trader “would add value” to the Cartel, he was invited to join for a “1 month trial,” but was advised “mess this up and sleep with one eye open at night.”

On one occasion, a Barclays FX trader explicitly discussed with a JP Morgan trader coordinating the prices offered for USD/South African Rand to a particular customer, stating, in a November 4, 2010 chat, “if you win this we should coordinate you can show a real low one and will still mark it little lower haha.” After the JP Morgan trader suggested that they “prolly shudnt put this on perma chat,” the Barclays trader responded “if this is the chat that puts me over the edge than oh well. much worse out there.”

On June 10, 2011, the Barclays trader stated explicitly in another chat that “we trying to manipulate it a bit more in ny now . . . a coupld buddies of mine and I.”

As the future Co-Head of UK FX Hedge Fund Sales (who was then a Vice President in the New York Branch) wrote in a November 5, 2010 chat: “markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.”

This a million times.

As regulation increases, you make sure only the big guys follow it to their satisfaction.

And of course in the end there will be a lot of "hows, ifs, buts" falling through the cracks.

Some regulation of course is needed, but it seems the best regulation is not giving anyone the advantage to be the dominant player.

What makes you think that the people involved in the disruption of the banks won't partake in the same shenanigans? Do you think "bankers" are inherently evil, while their replacements will be inherently good? The Bitcoin world says otherwise. "Tech people" are stealing people's money left and right.

>If the banks are "too big to jail/fail" then maybe we should make them smaller...

Sure, and then we'll let all the pseudo-government-controlled banks in say, China, or even Canada do all the large-scale banking business globally.

The business of banking is vastly larger than cheqing accounts and ridiculous ATM fees that people like us deal with day to day and complain about. That's why the industry is heavily regulated, and why the banks are so large, and why the local credit union in Podunk isn't underwriting the Facebook IPO. It's also why some SV startup isn't going to ride in and up-end the industry without itself becoming some financial behemoth that needs to be regulated.

How do you think you make banks smaller ? Hint: it's through regulation.

The GFC and all the problems it has caused was due to a lack of regulation. It's almost always a good thing. And the highly regulated nature of the Australian financial system is the main reason that it survived the GFC with zero casualties. Capital requirements, lending practices, public disclosure etc. These are aspects of the banking sector which need MORE regulation not less.

"The CFTC and OCC orders for Citi have no profit figures at all. So we have one case of Citi making $99,000. The FCA order covers conduct over a six-year period, though that might be a bit generous. Figure 250 trading days a year and you get $150 million of profits for Citi if every single day was as "impressive" and "lovely" as the day singled out by the FCA as, one assumes, a particularly egregious example of manipulation. That's not the case: The CFTC order, for instance, recounts a fixing in which "the Citibank trader reported that he was 'hosed.'" The manipulation was not foolproof, and fools abounded. But take $150 million as an upper bound, and Citi paid about an order of magnitude more in fines than it made in manipulative profits."

0. http://www.bloombergview.com/articles/2014-11-12/banks-manip...

http://graphics.thomsonreuters.com/15/bankfines/index.html

The cynic in me reckons at best he'll get a fine, a suspended sentence and we'll never know who he was. Not exactly justice.

Also, the "paid by ..." is a very-very interesting topic. Due to their sheer size and market share, they set the price for banking services. They don't even need to collude, but since there are not too many global banking conglomerates, they naturally have a sort of cooperation and competition, which basically leads to similar prices. (Though a bit different price structure, but that's irrelevant for a sizeable enough basket of financial products and sample of consumers.)

So, it's quite impossible to force them to eat the fines, because for that you'd need a bank that wasn't on in this "market optimalization", but is large enough to absorb/caputre the market share if the culprits rise prices. But there doesn't seem to be. (And local smaller banks are already doing as good as they could to charm customers away from the big ones, so it's unlikely that they'll help keeping prices down.)

However, if it's shareholders, that's not a problem. They should exercise some responsibility when voting with their money. And while we're at that, the same goes for taxpayers and customers too.

On the other, you want to prohibit all discussion of news that might somehow reflect negatively on certain people involved with some kinds of finance.

Is that right?

Likely the reason this article is upvoted is that it truly boggles the mind that after years and years of blantant fraud and rigging there is yet one banker to go to jail and instead the politicians, judiciary, regulators and central bankers happily cover for, or even join in on the manipulation and rigging.

If markets were to be un-rigged and allowed to function, banks were to stop getting hand-outs and fraud started to be persecuted, this would only be a good thing for 99.9% of people involved in the finance industry.

Maybe this knee-jerk "anti-finance" climate you speak of would even disappear.