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`We Rig(ged) Currencies’: Seven Megabanks Make First Admission
13 November 2014
LPAC — With the Argentine and Russian currencies under London imperial attack, and Argentina prosecuting banks for currency manipulation, seven of the biggest trans-Atlantic mega-banks have admitted they have rigged currencies as a regular practice of their foreign exchange ("forex") traders. Six of the banks are the City of London’s HSBC and RBS, U.S.-based JP Morgan Chase, Citibank, and Bank of America, and the Swiss banking giant UBS. They "settled" with Britain’s Financial Conduct Agency (FCA) and the U.S. Comptroller of the Currency and Commodity Futures Trading Commission (CFTC), paying combined fines totalling a paltry $4.3 billion for fixing a market with $5 trillion a day in trades. A seventh bank, London’s Barclay’s, has made the same admission but not yet "settled", because it may face criminal charges. Notably, some of the banks admit that their traders were continuing to trade "forex" illegally through the end of 2013 at least. The huge daily "forex"/derivatives trading markets remain unregulated, because then-U.S. Treasury Secretary Tim Geithner insisted on this in 2010 when the Dodd-Frank Act was being passed. Geithner said this was absolutely necessary to guarantee enough "liquidity" in these markets; but liquidity materialized as bottles of champagne and scotch the banks were promising each other’s traders for colluding to rig currency values at the close of each day. These speculative markets take such huge dimensions because of the Nixon Administration’s early-1970s abandonment, under British forcing pressure, of President Franklin Roosevelt’s Bretton Woods fixed-exchange-rate system. Already by the time of speculator George Soros’s "raid on the pound sterling" in 1981, it became clear that forex speculation forces were more powerful than central banks trying to defend a currency in those markets. One regulator, New York State Financial Services Superintendant Benjamin Lawsky, refused to sign the settlement, because it is so "light touch," according to Bloomberg News sources in New York. In fact, the FCA official making the announcement, Martin Wheatley, tried to maintain the line that the seven big banks’ traders "attempted to fix" the forex market, rather than that they did rig it. Such were the first regulatory bleatings — including Geithner’s — about "attempts to rig LIBOR," before it became clear that the entire LIBOR process, and related derivatives indices, were in fact rigged by these same banks from at least 2001 until the 2008 crash. For now, the banks admit they colluded illegally to make killings from the daily fixings of currency values. But the traders’ collusion communications make clear they did this by "slamming" their clients, which can include national central banks attempting to defend their currencies. Paul Gallagher |