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Saturday, 23 October 13:45 (GMT -05:00)

Foreign exchange market

Experts on LIBOR, Forex and Bank Collusion


Forex market still lacks international regulation despite being the world's biggest financial market. Apparently, when you see trillions of dollars being turned over on a daily basis, it is very easy to be fall prey to the desire to manipulate the market in order to get a bigger piece of this huge and very tasty pie.




Not so long ago, the scandal around LIBOR (London Interbank Offered Rate) was revived since some investigators claimed to be able to prove the fact of manipulating LIBOR rates by traders working for the world major banks, including Lloyds Banking Group, Royal Bank of Scotland , Standard Chartered, Societe Generale, Credit Suisse, Deutsche Bank, Goldman Sachs.
Market Leader and Masterforex-V Academy tried to analyze the details of the scandal to find out whether those traders really can manipulate the market.
DFS Wants Details of Currency Trading
Not so long ago, the Department of Financial Services (New-York) filed a request to several banks. The request forces the banks to show te regulator all the documents revealing the details of their currency trading operations in order to find out whether the banks could have been manipulating the market. The list of the banks includes:

Lloyds Banking Group, Royal Bank of Scotland , Standard Chartered, Societe Generale, Credit Suisse, Deutsche Bank, Goldman Sachs.
It should be noted that the DFS regulates those banks that work under the license of the state of New York.
British regulators were the first to start investigating into the matter. It all stated in April 2013. Now, similar investigations are being conducted in Hong Kong , the USA and Switzerland. The banks are accused of collusion aimed at collectively benefiting from Forex manipulations. In particular several sources claim that traders from several major banks shared insider information about client orders to dominate the market and benefit from it.
At that time, some of the major banks agreed to pay big-scale fines to resolve the issue. The total sum of those fine is around $6bn. Still, it is nothing if to compare the sum to the daily turnover of Forex, which is currently over $5000bn!
The biggest players of the contemporary Forex market are Citigroup (14,9%) and Deutsche Bank (15,18%), while London is the world's biggest currency marketplace.
On top of that, we should keep in mind that major banks dismiss some of their traders on a weekly basis.



Masterforex-V Academy's Comments
According to the trading experts working for Masterforex-V Academy, Europe's Best Online Forex Training Project since 2009, currency traders can be subject to emotional overload especially when they run big-scale accounts since their mistakes can be rather costly for banks, hedge funds or other institutions they work for. 
Sometimes, traders do make unconscious mistakes. However, some of them can and do really abuse their jobs, which may result in major loses for banks.

Still, most of those trading scandals are designed to delude the crowd by trying to persuade them that all those manipulators are responsible for endless banking and financial crises. Still, real manipulators and real reasons may stay hidden forever…



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