Which 8 banks?
Bloomberg mentioned Deutsche Bank, Credit Suisse, and Credit Agricole were mentioned in a separate bond trading "cartel". Would not be surprised if they were part of the eight.
EU charges eight banks over alleged government bond cartel
21–30 of 59 posts
Re: EU charges eight banks over alleged government bond cartel
#22As an ex trader, I'm not surprised. Customers on the buy side have been suspicious for years, but any one of us would not have the pieces to figure it out. Roughly in the mid 2000s it got very common for people in the trading business to get on chatrooms. Bloomberg is probably the best known, but somehow Yahoo Chat also has a piece in the commodity space. The chats go on constantly, and I would guess people just didn…
Same happens (happened?) with the cryptocurrency market, except unregulated; just some people in a chatroom or voice chat, some with a lot of money to spend, working together to influence the price of a currency and the exchanges. Giving each other advance warning of big trades coming in.
Re: EU charges eight banks over alleged government bond cartel
#23Which 8 banks?
I work in finance (although on the buy side), my gut feeling is that it's the usual suspects: big investment banks. The people manning the prop desks in these institutions get to know each other eventually as the landscape is fairly small and they all work for/with each other eventually. This means that cliques along the lines of "I'll scratch your back if you'll scratch mine" form naturally. It's almost impossible t…
> It's not in the best interest of the banks to monitor their internals too closely.
So keep raising the fines. make them proportional to the banks turnover, or their perceived size if it appears that they are trying to disguise profits. The leadership of the banks need to follow the rules too, and make sure that the organisation follows those same rules. Maybe they should be held accountable when that doesn't happen.
As we found out when Health & Safety legislation was enacted which did this, it turns out that when you start holding people personally accountable for their actions (or lack of), then changes start to happen in the culture of the workplace. I walked around a factory recently and they take the health and safety of themselves, their colleagues and their visitors very seriously.
Re: EU charges eight banks over alleged government bond cartel
#24As an ex trader, I'm not surprised. Customers on the buy side have been suspicious for years, but any one of us would not have the pieces to figure it out. Roughly in the mid 2000s it got very common for people in the trading business to get on chatrooms. Bloomberg is probably the best known, but somehow Yahoo Chat also has a piece in the commodity space. The chats go on constantly, and I would guess people just didn…
Same happens (happened?) with the cryptocurrency market, except unregulated; just some people in a chatroom or voice chat, some with a lot of money to spend, working together to influence the price of a currency and the exchanges. Giving each other advance warning of big trades coming in.
The infamous whale groups on telegram. You gotta be super careful with these, there are lots of scam. Ex: the leader of the group tells everybody to sell at 1pm, but actually himself and other get out just before and you end up the only one still holding the bag.
Re: EU charges eight banks over alleged government bond cartel
#25Earlier quoted context omitted.
Same happens (happened?) with the cryptocurrency market, except unregulated; just some people in a chatroom or voice chat, some with a lot of money to spend, working together to influence the price of a currency and the exchanges. Giving each other advance warning of big trades coming in.
The infamous whale groups on telegram. You gotta be super careful with these, there are lots of scam. Ex: the leader of the group tells everybody to sell at 1pm, but actually himself and other get out just before and you end up the only one still holding the bag.
I think they should be assumed scams period. That is the whole point of the Nigerian Prince fraud aspect - reporting them would be "I got duped while attempting financial crimes!".
Re: EU charges eight banks over alleged government bond cartel
#26Earlier quoted context omitted.
>In that kind of situation do the normal rules apply? Yes.
So if at the worst extent of the financial crisis it was becoming clear a bank was going to collapse. If the central bank fast tracked through a deal to get that bank sold over a weekend, you would be against that?
I don't know how you could even get that idea.
Upholding the law is significantly more important than saving some company, even if it's a large bank.
If you're going to throw law and order out of the window over saving some shitty banks, then you already have a bigger problem than disagreeable numbers on balance sheets.
Re: EU charges eight banks over alleged government bond cartel
#27Earlier quoted context omitted.
I work in finance (although on the buy side), my gut feeling is that it's the usual suspects: big investment banks. The people manning the prop desks in these institutions get to know each other eventually as the landscape is fairly small and they all work for/with each other eventually. This means that cliques along the lines of "I'll scratch your back if you'll scratch mine" form naturally. It's almost impossible t…
> It's not in the best interest of the banks to monitor their internals too closely. So keep raising the fines. make them proportional to the banks turnover, or their perceived size if it appears that they are trying to disguise profits. The leadership of the banks need to follow the rules too, and make sure that the organisation follows those same rules. Maybe they should be held accountable when that doesn't happen…
Seems like an effective approach to any fines would be to sum up the estimated profits they made, add in the estimated cost to innocent parties, then multiply it by some number.
Of course that relies on someone actually being held accountable for a change...
Re: EU charges eight banks over alleged government bond cartel
#28I bet no one would go to prison
Re: EU charges eight banks over alleged government bond cartel
#29Earlier quoted context omitted.
So if at the worst extent of the financial crisis it was becoming clear a bank was going to collapse. If the central bank fast tracked through a deal to get that bank sold over a weekend, you would be against that?
I don't know how you could even get that idea. Upholding the law is significantly more important than saving some company, even if it's a large bank. If you're going to throw law and order out of the window over saving some shitty banks, then you already have a bigger problem than disagreeable numbers on balance sheets.
It isn't about saving the company, or its share holders.
It's about saving all the savings of other depositors, about preventing a run on that, and other banks, about trying to maintain the banking system.
Banking laws are meant to maintain stability. If they get in the way of that, they should at least be re examined.
Re: EU charges eight banks over alleged government bond cartel
#30To play devils advocate. Around that time you had periods where banks didn't know if their competitors were going to be around next month, there were also periods where they didn't know if several major European nations were going to be defaulting on their debts. In that kind of situation do the normal rules apply? I don't doubt during the banking crisis several 'dodgy' deals were done between the central banks, poli…
Yes, normal rules -- i.e. the law -- still apply.