| Online: | |
| Visits: | |
| Stories: |
| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
Banks buy their way out of Currency Manipulation Scandal
It is the second reprimand in less than six months against five major multinational banks for currency manipulation. The Department of Justice of United States and the Federal Reserve closed a deal with five of the largest banks in the world, which will be fined $ 5.7 billion dollars for having manipulated currency exchange rates for five years. It is the second reprimand derived from in less than six months. This time, the banks have also admitted guilt in the fraud, which can lead to criminal charges against its employees. Don’t hold your breath for those criminal charges, though. No single banker has gone to jail in recent history despite multiple and continuous violations of existing law. The entities signing the pact with American authorities include JPMorgan Chase and Citigroup, the British Barclays, Royal Bank of Scotland and UBS Switzerland. The banks were accused of packaging low-quality debt products that were at the center of the recent financial crisis and later were cited in the investigation into the manipulation of interbank interest rates. Of the total figure announced Wednesday, $ 2.5 billion will be paid as part of “criminal punishment”, an unprecedented amount that fits the scale of the currency “cartel” that operates in the financial market. To this amount US authorities added another $1.8 billion imposed in parallel by the Federal Reserve. The agreement also involves other regulatory agencies. It is estimated that the illicit profit from these transactions amounted to $ 10 billion, which makes it unclear why the banks are only being fined for half of those profits. A more realistic punishment would be to confiscate the totality of the profits on top of imposing other penalties. Barclays is the one that suffers the greatest punishment, with a $ 2.4 billion fine, that includes $1.3 billion to close the investigation performed by the department of financial services in New York, the regulator of the futures market in the US and the authority financial behavior in the UK. The penalties do not really mean that the banks have been caught with their hands in the cookie jar. Instead, it means that they are guilty of fraud, but that they were able to bribe public entities with payments that represent only a fraction of the profits amassed through the fraud in order for the investigation to be suspended. Citigroup paid $1.2 billion while JP Morgan will pay $ 892 million. In the case of RBS the fine amounts to $ 669 million and UBS will pay $342 million. The US Central Bank has also fined Bank of America with $205 million. A very important point to make is that the banks and the authorities have been negotiating this settlement for months after two years of investigations. According to the investigation, operators from rival banks exchanged messages where they arranged strategies and shared confidential information on the movements of their customers, which they later used to agree strategies and limit losses. The currency exchange market moves $5.3 billion a day, which is about the same number imposed in fines to the five banks accused of fraud. The final amount of the fine is likely to be announced on Wednesday, as indicated by several sources, based on the agreement reached by each bank. The head of the U.S. Justice Department, Loretta Lynch, insisted that this “severe” reprimand should be a “reminder” to any entity operating in Wall Street that “use the financial system in their favor” and “inflate” the benefits of companies while taking advantage of customers and consumers in general. She explained that members of this illegal plot created a chat to communicate in a language that allowed them to escape existing controls. The fraud committed by these banks took place bewteen 2007 and 2013. Read the rest below at the source link
Source: http://real-agenda.com/banks-buy-their-way-out-of-currency-manipulation-scandal/
