Five of the world’s top banks have pleaded guilty to manipulating the prices of world currencies and interest rates, the most serious financial crime one can possibly commit. Citigroup, JPMorgan Chase, Royal Bank of Scotland, and Barclays have pleaded guilty to felony antitrust violations while UBS pleaded guilty to playing a role in manipulating the Libor benchmark interest rate. These banks will pay a total of nearly 5 billion dollars in fines and penalties.
According to the Justice Department, traders used online chat rooms to communicate about manipulating foreign currencies. These chat room conversations provided key evidence of criminal conspiracy. For example, a high-ranking Barclays trader wrote “If you ain’t cheating you ain’t trying.” Another responded “Yes, the less competition the better.”
Although these companies have plead guilty to criminal charges, none of the bank employees have been held responsible.
The difference between this crime and many of the crimes discovered in 2008 is that in 2008, these banks were committing in house fraud against their own clients and against the markets. However, in this situation these banks cooperated with each other to manipulate foreign currencies.
Unfortunately, the foreign exchange market is the least regulated financial market in the world while also being the largest.
Earlier in May, independent Senator Bernie Sanders introduced the Too Big to Fail, Too Big to Exist Act, a bill that requires regulators to establish a list of financial institutions and other huge entities whose failure would pose calamitous risk on the US economy without a taxpayer bailout. The bill calls for these institutions to be broken up. Sanders claims that the list must include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. (Bernie Sanders recently announced his bid for 2016 presidential elections).
This bill is significant because since 2008, the top six banks have grown considerably larger than before and are still engaging in risky behavior. If one of these firms were to fail again, the US could see damages far beyond that of 2008.
This news feature is a summary of a Democracy Now interview with Matt Taibbi, an award winning writer with Rolling Stone magazine. Click here to watch the full interview.
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2 thoughts on “Big Banks Plead Guilty to Rigging World Currencies”
Sadly enough, I don’t forsee any of these financial institutions being held accountable of punished for their abhorrent actions because of their status, bribery, and “worth”. This is tragic, and I believe the trend will only continue *smh.
It is very tragic. I hope Bernie Sanders’ bill passes. But word on the street is that politicians are too scared to ever pass legislation like that.