“Tourists wouldn’t notice it: Any manipulation of foreign currency exchange rates might add a fraction of a cent in paying for a meal at a Parisian bistro or booking a tour at the Great Wall of China.
“But multiply that by $5 trillion — the amount that trades every day on the massive foreign currency markets — and it adds up to serious money for currency traders and even problems for multinational corporations.
“Allegations Wednesday that major U.S. and European banks manipulated foreign exchange rates gave another serious black eye to the banking industry and another blow to public confidence in the financial system.
“In a cross-border sweep, U.S., British and Swiss authorities accused JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and three other global banks of rate-fixing, and the banks agreed to pay about $4.3 billion in fines to settle the cases. The others are HSBC Bank, the Royal Bank of Scotland and UBS.
“The penalties, which include the largest ever issued by Britain’s Financial Conduct Authority, are part of civil, criminal and regulatory investigations stemming from alleged banking industry misdeeds leading up to and through the Great Recession.”
“What it tells you is that there is a culture at the global banks that has no fear of prosecutors or regulators catching them, or if catching them, of meaningfully punishing them,” said Dennis Kelleher, chief executive of Better Markets Inc., a Washington nonprofit advocate of stricter financial regulation.
“If the biggest downside for a bank is that you have to pay a fine — with shareholders’ money that you get to deduct from your taxes — that is the definition of incentivizing more lawbreaking and crime,” he said.
Read the full Los Angeles Times article here.