All talk but no action against fraudulent bankers

Joint press conference by Viviane Reding, Vice-President of the EC, and Michel Barnier, Member of the EC, on the amended proposal for a Directive on Criminal Sanctions for Insider Dealing and Market Manipulation, (EC Audiovisual Services).

Joint press conference by Viviane Reding, Vice-President of the EC, and Michel Barnier, Member of the EC, on the amended proposal for a Directive on Criminal Sanctions for Insider Dealing and Market Manipulation, (EC Audiovisual Services).

The European Commission plans to propose on Wednesday 18 September draft legislation against the fraudulent setting and use of financial benchmarks like Euribor, Libor and the Baltic Indices. This comes on top of investigations launched recently in London, New York even in Brussels, where bankers are being criminally prosecuted, and thirteen giant western investment banking groups and two support bodies are accused of having created a trust, setting prices in the over the counter trade of Credit Default Swaps and Derivatives. Libor, Euribor and CDSs are at the centre of financial transactions reaching hundreds of trillions.

Financial jungle

In this global financial jungle the EU Commission as a modern ‘Don Quijote de la Mancha’ prepares legislation to “set out new rules for the production and use of benchmarks referenced in financial instruments and financial contracts, in order to ensure their integrity by guaranteeing that they are not subject to conflicts of interest, reflect the economic reality that they are intended to measure and are used appropriately”. Is it Quixotism or something else? We will see about that in a while.

Of course all EU Commissioners are aware of the fact that Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy has accused 13 major world banking groups of forming a global cartel to exploit the rest of the economy. Hopefully this new initiative to hold responsible a large number of global banking groups for fraudulently setting Libor, Euribor and the Baltic Indices along with other market benchmarks comes as a help to Almunia’s efforts to prove the CDSs market cartelisation. If the true political will to expose the wrongdoings of major financial groups is there, this won’t be difficult.

Already the British and the American prosecuting authorities have worked hard on the Libor and Euribor, cases while Almunia’s people have established reportedly beyond reasonable doubt the existence of a cartel, setting CDSs’ prices and terms. It is obvious that this new Commission’s initiative “doubting the accuracy and the integrity of financial benchmarks” is targeted against the same banking conglomerates.

Big stakes

At this point it has to be reminded that back in December 2012, many months after the Libor scandal broke out, the 27 EU justice ministers reached agreement on the Commission’s proposals for a Directive on insider dealings and market manipulation that will criminalise such behaviour. Now the Commission has done its homework and is ready to produce on 18 September a relevant proposal. Understandably this would come on top of the penal prosecution under member states’ law.

In all those cases the stakes are huge. Almunias’ investigations may lead to fines of up to 10% of total turnover of the thirteen major world banks and their two supportive groups {Bank of America-Merrill Lynch, Barclays, Bear Stearns (now part of JP Morgan), BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, UBS and the Royal Bank of Scotland as well as Markit, the financial information firm and the International Swaps and Derivatives Association}. Apart from the huge fines to banks there might be penal proceedings against bankers. If all that turn out to be true the world will be a better place. This is not revengeful thinking. The damage to the real economy and the working people is already done and it is immense, but if the culpable parties get away unpunished the tragedy will be staged again and again, with the same victims and victimizers.

Unfortunately there is a lot of talk but little is done to punish those who send the world to the 2008 credit crunch and then profited from it. Not one New York banker has been convicted, at least not yet. The same is true in Europe. EU citizens are always eager to see the fraudsters behind bars. The European Union has pompously announced all those ‘initiatives’ but still without tangible results. All that have discouraged the European Peoples and the rate of participation in the European election next year will show it for sure. The rise of extreme or grotesque political parties is a direct result of all that.

 

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The next Google in biotech: will it be Chinese?

Italy should boost spending and strengthen cooperation and integration of employment services to help more people into work

JADE Testimonial #2: Jacques @ Process mapping

Federalist EU ‘naively’ believes Washington shares her TTIP high fever

World-famous cultural institutions closed due to coronavirus are welcoming virtual visitors

Economic growth ‘exceeds expectations’ but trade tensions are rising: UN report

European Energy Union: Integration of markets and need for in-house energy production

OECD presents revised Codes on capital flows to G20

Brexit: Is there anybody supporting a non-violent separation?

An open letter from business to world leaders: “Be ambitious, and together we can address climate change”

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

Thousands risk lives fleeing fighting in Syria’s last ISIL stronghold

Markets can accelerate the transition to a low-carbon economy

Coronavirus: Commission presents practical guidance to ensure continuous flow of goods across EU via green lanes

‘Reasons to hope’ for sustainable peace in Central African Republic – UN Mission chief

Commission presents review of EU economic governance and launches debate on its future

WEF Davos 2016 LIVE: Banking moguls continue brandishing financial Armageddon to intimidate us all but in Davos they worry about the very distant future

Here’s what a Korean boy band can teach us about globalization 4.0

Nearly three million more displaced year-on-year, warns refugee agency chief, but solutions are within reach

3 ways blockchain can revolutionize global supply chains

Commission’s report shows that targeted investment and robust digital policies boost Member States’ performance

Immigrants make good entrepreneurs. This study proves it

Getting African Women into the Boardroom

3 steps to making multistakeholder partnerships a powerful force

Creating shared value: an opportunity and challenge for entrepreneurship

Insurer CEOs Reveal Marketing Strategies that Communicate the True Value of Insurance Products & Services to the Customer

MEPs reject making EU regional funding dependent on economic targets

Here are three technology trends changing the way you travel

75 years after Auschwitz liberation, antisemitism still threatens ‘foundations of democratic societies’

What does global health translate into?

Impact investment favours expats over African entrepreneurs. Here’s how to fix that

Robot inventors are on the rise. But are they welcomed by the patent system?

What we know about the Wuhan coronavirus and urgent plans to develop a vaccine

Polluted lungs: health in the center of environment discussion

Thomas Cook bankruptcy: Better consumer and employee protection needed

The Americans are preparing for the next financial crisis

Rare earths are the new battlefront in the US-China trade war. But what are they?

The challenges of the universalization of the health system in Brazil. What can we change?

Strawberries and child support; a Thai partnership

Despite progress towards peace, Afghanistan facing ‘daunting challenges’ ahead of presidential vote

UN calls for action to tackle ‘ubiquitous but invisible’ global road safety crisis

COP21 Breaking News_04 December: Commitments Made to Reduce Black Carbon, Methane and HFCs

The movement of anti-vaccers: taking humanity back 200 years

Pedro Sánchez: We must protect Europe, so Europe can protect its citizens

Multilateralism’s ‘proven record of service’ is focus of first-ever International Day

The Czech economy is thriving but boosting skills and productivity and transitioning to a low-carbon productive model is vital to sustainable and inclusive growth

A day in the life of a refugee: We should be someone who helps

Global aid appeal targets more than 93 million most in need next year

State aid: Commission invites comments on simplified rules for State aid combined with EU support

5 ways to integrate Syrian refugees into the workforce

Global Citizen – Volunteer Internships

VW emissions scandal: EU unable to protect its consumers against large multinationals

Poland: €676 million worth of EU investments in better rails and roads

The European Sting live from the World Economic Forum 2015 in Davos

South Africa’s economy in 5 charts

What can we do about the crisis in trust in public institutions?

Why is Merkel’s Germany so liberal with the refugees? Did the last elections change that?

New labour laws in Qatar benefiting migrant workers a ‘momentous step forward’: ILO

Yemen: 11 more ‘terrible, senseless’ civilian deaths reported, following attack in Sana’a – top UN official

Sacrifice of fallen ‘blue helmet’ to be honoured with UN’s highest peacekeeping award

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s