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EU charges eight banks over alleged government bond cartel

reuters.com

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Re: EU charges eight banks over alleged government bond cartel

#51

Post by maze-le »

benj111 wrote: post #48
acct1771 wrote: post #47

Earlier quoted context omitted.

> And if it stopped the entire global economy going tits up, I'm ok with that. Why? Genuinely - why is the corrupt financial system we've propped up worth saving?

Because we are inextricably wrapped up in the financial system? And getting rid of it would cause massive pain, real and metaphorical. What replacement financial system do you envisage? I cant think of a revolutionary financial system that I'm confident, could be better. And if its evolutionary, why would you chuck out what we've got?

>> And getting rid of it would cause massive pain, real and metaphorical.

I don't doubt the premise, I doubt the scale of the result.

>> I cant think of a revolutionary financial system that I'm confident

This might be true, but it is in no way revolutionary. Defaulting is a very normal routine in every capitalist system. That's why there is always a 'risk' involved when considering investments. After a big default, there would still be the necessity to trade, exchange, and hedge the risks of deals like that. All of this would be valued, given a price- and a risk tag and so on [business as usual -- except the weeds have been rooted out]...

What will be lost is "money" invested in "values" that werent values to begin with.

>> And if its evolutionary, why would you chuck out what we've got?

If it really is evolutionary, you should give evolution a chance and not intervene at the first sight of trouble.

If a gambler has made a bet on the wrong horse, and keeps betting on the wrong horse, with money you provided, wouldn't you be concerned? Instead of funneling even more money to the gambler, you might be incentiviced to find other options.

Re: EU charges eight banks over alleged government bond cartel

#52

Post by benj111 »

maze-le wrote: post #51
benj111 wrote: post #48

Earlier quoted context omitted.

Because we are inextricably wrapped up in the financial system? And getting rid of it would cause massive pain, real and metaphorical. What replacement financial system do you envisage? I cant think of a revolutionary financial system that I'm confident, could be better. And if its evolutionary, why would you chuck out what we've got?

>> And getting rid of it would cause massive pain, real and metaphorical. I don't doubt the premise, I doubt the scale of the result. >> I cant think of a revolutionary financial system that I'm confident This might be true, but it is in no way revolutionary. Defaulting is a very normal routine in every capitalist system. That's why there is always a 'risk' involved when considering investments. After a big default,…

I was responding to the parents question

"why is the corrupt financial system we've propped up worth saving? "

Re: EU charges eight banks over alleged government bond cartel

#53

Post by throwaway0009 »

short_sells_poo wrote: post #45
throwaway0009 wrote: post #38

Earlier quoted context omitted.

> The people manning the prop desks in these institutions The Volcker Rule (part of Dodd-Frank) prohibits prop trading at banks (with few exceptions). The big banks have been actively discouraging it as well, changing comp structures to avoid rewarding prop trading. > trading happens directly between traders and never crosses exchange boundaries All these trades still need to be cleared, no? There's a structure to ma…

> The Volcker Rule (part of Dodd-Frank) prohibits prop trading at banks (with few exceptions). Ok, replace prop trading with a fund trading OTC products that the bank runs. > All these trades still need to be cleared, no? There's a structure to markets that you're papering over here. They do, and as I wrote in a bit that you didn't quote, it's largely irrelevant because it's not that difficult to hide collusion. Heck…

> Look I'm in the industry.

So you’re the only person on HN who works in finance?

Re: EU charges eight banks over alleged government bond cartel

#54

Post by xiphias2 »

joering2 wrote: post #50
bboreham wrote: post #33

Earlier quoted context omitted.

Traders went to prison for the Libor scandal; why would you think no-one will go to prison for this?

Too big to jail. I seen Elizabeth Holmes few weeks ago in California. having breakfast with some friends at very luxury spot. Laughting and enjoying her life. No worries at all.

Trump was also speaking down on the stock market bubble and the inflated banking system...until he was elected.

Re: EU charges eight banks over alleged government bond cartel

#55

Post by h1srf »

throwaway0009 wrote: post #38
short_sells_poo wrote: post #5

Earlier 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…

> The people manning the prop desks in these institutions The Volcker Rule (part of Dodd-Frank) prohibits prop trading at banks (with few exceptions). The big banks have been actively discouraging it as well, changing comp structures to avoid rewarding prop trading. > trading happens directly between traders and never crosses exchange boundaries All these trades still need to be cleared, no? There's a structure to ma…

> The Volcker Rule (part of Dodd-Frank) prohibits prop trading at banks (with few exceptions). The big banks have been actively discouraging it as well, changing comp structures to avoid rewarding prop trading.

It's not prop trading...I'm just macro hedging which is completely fine

Re: EU charges eight banks over alleged government bond cartel

#56

Post by Gibbon1 »

short_sells_poo wrote: post #5
Fnoord wrote: post #2

Which 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…

> This means that cliques along the lines of "I'll scratch your back if you'll scratch mine" form naturally.

Problem I have with Econ 101 BS is this. Different industry, in the city I grew up in the four large electrical contractors get busted every 10-15 years for bid rigging city and county contracts. They pay fines, no one goes to jail. I feel like this sort of stuff also goes on with private bids, but it never gets called out.

Re: EU charges eight banks over alleged government bond cartel

#57

Post by Mirioron »

short_sells_poo wrote: post #35
clort wrote: post #23

Earlier quoted context omitted.

> 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…

Alas, I don't think this is going to happen, because financial accidents are rarely gory so it's tricky to mobilize the masses. If someone gets pounded to pulp by a power hammer, that will get plenty of visceral coverage and politicians will latch on to score easy cookie points for being seen "committing good deeds". Finance is too abstract for this to work. "Big Bank Co ABC defrauding other institutional clients by…

I wish people more readily accepted they human lives have a monetary value of some degree. If you cause a lot of monetary damages to a large number of people then that's going to lead to a cost in human lives. This way people might more readily accept what impact this kind of defrauding has.

Re: EU charges eight banks over alleged government bond cartel

#58

Post by cinquemb »

benj111 wrote: post #29
chmod775 wrote: post #26

Earlier quoted context omitted.

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.

>Banking laws are meant to maintain stability. If they get in the way of that, they should at least be re examined.

I hope one thinks this can be done ad infinitum to maintain stability…

Re: EU charges eight banks over alleged government bond cartel

#59

Post by nicktelford »

mtgx wrote: post #32
nicktelford wrote: post #9

Earlier quoted context omitted.

A plausible reason is that it would likely impact their market value as shareholder confidence in those banks is affected by the potential for large fines in the near-future. Since the banks haven't actually been found guilty of anything (yet), they're simply being investigated, it would be damaging to release their names.

The "economy will be hurt" if bankers go to jail is getting a little old, isn't it? It's also sounds like exactly the kind of thing bankers would like the public to believe and would try to influence media narrative to repeat it.

My point is simply that they haven't been found guilty of anything yet, just charged. If they're subsequently cleared of any wrongdoing, but their market value is tanked by the accusation, they're effectively being punished for nothing.

Innocent until proven guilty and all that.

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