Saturday, February 18, 2012

WSJ: "Traders Manipulated Key Rate, Bank Says"

The Wall Street Journal February 17, 2012 p. C1.

This is an amazing story and I am surprise that it was buried on page C1.

The WSJ reports:
[excerpted] "A group of traders and brokers successfully managed to manipulate an interest rate that affects loans around the world, one of the banks being investigated has told reporters. In a court filing in Ottawa, Canada's Competition Bureau said a bank it didn't identify has told the agency that people involved in the alleged scheme 'were able to move' interest rates"

Paraphrasing: The article explains that the targets for the manipulation were the yen London interbank offered rate (yen Libor) and specific financial derivatives linked to Libor.

The article reports that six banks on the yen Libor panel, including Citigroup, Deustsche Bank AG, HsBC Holdings PLC, JP Morgan Chase & Co., Royal Bank of Scotland Group PLC and UBS were involved in agreements (i.e., conspired) that submitted artificially low and high quotes.

This is out and out fraud and conspiracy!

One wonders why this is case is being filed in the Canadian court system? Is it because the American and British systems are so corrupt that the whistle blower thinks them unlikely to deliver justice?

The level and scope of corruption by the big banks are hard to fathom.

They deliberately flout all law and order designed to make markets transparent and "free."

Manipulated markets are not "free" markets and serve no interests other than those of the  manipulators.

The big banks need to be forcibly broken up and re-regulated. Tobin taxes need to be installed and enforced. Dark pools and trading need to be brought into the open and regulated. Etc, etc., etc.

I have reported previously on specific examples of this corruption:

Research Article I wrote on the subject

Blog Entries: 
On the Use of High Frequency Trading and Naked Short Selling to Manipulate Markets and as Tools for Financial Warfare 

On Hedge Funds and Other Financial Institutions Conspiring to Take Down Companies and Countries

On financial conspiracies

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