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Rigged-Benchmark Probes Proliferate From Singapore to UK
Key Excerpts from Article on Website of Bloomberg Businessweek
Posted: June 25th, 2013
http://www.businessweek.com/news/2013-06-16/rigged-benchmark...
The probe of Libor manipulation is proving to be the tip of the iceberg as inquiries into assets from derivatives to foreign exchange show that if theres a chance to rig benchmark rates in world markets, someone is usually willing to try. Singapores monetary authority last week censured 20 banks for attempting to fix interest rate levels in the island state and ordered them to set aside as much as $9.6 billion. Britains markets regulator is looking into the $4.7 trillion-a-day currency market after Bloomberg News reported that traders have manipulated key rates for more than a decade, citing five dealers. Its happened time and again: all of these markets have been influenced by major market-makers, which is a polite way of saying theyve been rigged, Charles Geisst, a finance professor at Manhattan College in Riverdale, New York, said. While the indexes under scrutiny are little known to the public, their influence extends to trillions of dollars in securities and derivatives. Barclays, UBS and Royal Bank of Scotland have been fined about $2.5 billion in the past year for distorting the London interbank offered rate, which is tied to $300 trillion worth of securities. Regulators are also probing ISDAfix, a measure used in the $370 trillion interest-rate swaps market, as well as how some oil products prices are set. Inquiries are broadening into the transparency of benchmarks whose levels can be determined by the same people whose income they affect. In the case of Libor, traders who stood to profit worked with bank employees responsible for submissions for the benchmark to rig the price.
Note: To read highly revealing major media articles showing just how crazy and unregulated the derivatives market is, click here. For deeply revealing reports from reliable major media sources on financial corruption, click here.
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