11 June 2015
The most recent scandal involving banks and trader-bankers has led to record fines against the perpetrators of billions of dollars. Should we not worry about this?
Amid public anxiety if not confusion over the possibility of Grexit – Greece exiting Eurozone – due to the stalling of negotiations between Greece and its creditors, there have been discouraging news about the record-breaking fines on a number of mega banks found to be involved in foreign exchange market rigging.
Six banks were fined US$5.6 billion by American authorities in May 2015 and $4.3 billion by the European authorities last November – all for their involvement in rigging the foreign exchange markets. In 2012 the Libor rigging prompted $9 billion in fines against a number of banks. According to Martin Wolf writing in the Financial Times, from January 2012 to December 2014 the total fines paid by financial institutions to US enforcement agencies amounted to $139 billion. And this does not seem to be the end of the story.
… J. Soedradjad Djiwandono is Professor of International Economics at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU) and Emeritus Professor of Economics, University of Indonesia. He was formerly Governor of the Indonesian central bank, Bank Indonesia.
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Last updated on 16/11/2015