THE scene was familiar: regulators meting out vast penalties to banks, scathing statements about gross misconduct, yet no individuals charged with any crimes and some confusion as to what exactly the banks were admitting to and what effect that would have. On May 20th a consortium of American and British government agencies announced settlements with six international banks regarding claims that they had manipulated currency markets. The six—Bank of America, Barclays, Citigroup, JPMorgan Chase, Royal Bank of Scotland (RBS), and UBS—agreed to pay $5.6 billion in penalties. All but UBS also admitted criminal behaviour, although the significance of that is unclear.
The settlement was the culmination of a long investigation into the actions of perhaps 20 employees of the six banks, who referred to themselves as the “cartel”. Between 2007 and 2013 they used coded communication in an online chat room to help one another make money, especially by rigging the two daily “fixes” of the exchange rate between the dollar and the euro, violating rules on market manipulation and collusion. As one of them wrote in a chat session, “If you...
from The Economist: Finance and economics http://ift.tt/1R5Npov
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