Six Banks Fined $3 Billion By Global Regulators On Currency Market Manipulation

Six big banks broke the rules and attempted to manipulate the currency market. You should also read this post on how UK Serious Fraud Office is investigating allegations of global currency market manipulation. You will be told often that the big size of the currency markets make is almost impossible to manipulation. This huge fine of $3 Billion shows that currency markets can be manipulated and it is only the vigilance of the global regulators that can stop it. Between 2008 and 2013, lax controls at the banks allowed traders to share confidential information and collude with their counterparts at other institutions in an effort to fix rates and increase profits.

Regulators said traders used private online chatrooms to coordinate their buying and selling to shift currency prices in their favor, aiming to making a profit for their banks at the expense of clients.

There are also allegations of banks fixing the gold prices. Citibank, HSBC, RBS, UBS and JP Morgan Chase were fined $1.4 Billion collectively by the US Commodity Futures Trading Commission (CFTC). Talk about currency market manipulation? We have been told again and again currency market is too big to be manipulated. Watch the video below in which US Department of Justice spokesperson reveals how a secret cartel of banks of manipulation the foreign exchange rates.

You must now know and understand the reason why market starts changing direction without any reason and rhyme. We should be thankful to the vigilance of the global regulatory authorities who have taken this matter of market rigging very serious. There has been a lot of talk in the financial media on less regulation. We personally believe without regulation, markets can go haywire. Just think about 2008 stock market crash. If there had been regulation, stock market crash of 2008 and the subsequent global financial crisis could have been averted. Greed is something that can only be controlled with regulation. It was greed that forced loan officers in the banks to hand out mortgage loans without proper scrutiny of the applicants. In few years this build up the housing market bubble that crashed and forced the rest of the market to crash with it.

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