Over the last year or so bankers have become more confident in their criticism of the general public. They complain that banks have been wrongly castigated for causing the financial crash of 2007-08. They protest that public are motivated by envy when attacking their bonuses. They demand that being paid eye-wateringly huge piles of cash is a necessary feature of good banking performance since only the very best, those of internationally outstanding ability, are required to caary out banks' highly technical financial activities. Ss such, not only is super-pay economically necessary, it is also morally justified. Overall, they portray themselves as having learned from the errors of the past and that they can now be trusted. Bashing-the-bankers should stop. Are you convinced?
Today five banks have been fined £2bn by UK and US regulators. This time they have been found guilty of conspiring to rig the international currency markets in order defraud their own clients. What their traders had done, and must have known by their superiors, was to set up a gang of traders from different banks. They shared information on what their clients had ordered - say, buying large amounts of £. Traders would begin buying the £ in small amounts during the day at (low) market rate. They then put in a sudden, coordinated pile of orders just before 4.00pm to make a peak in the demand for £s and thus push the market rate artificially high for a few minutes. Why 4.00pm? Because official daily rates are set in the 30 seconds before of after 4.00pm. They could then supply the cheap £s they bought earlier in the day to their clients at the artificially high official rate. This 4.00pm rate setting is known as "the fix"; quite.
So these Forex traders bought £s when the price was low knowing that they could sell later in the day when their gang would push it higher. Nice little profit; thank you very much. A regulator spokesperson said that bank traders would have to learn that the old culture won't do today. "Culture"? It is not bloody "culture". It is criminality. Grrrr.