Bl***y Banks Again
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Re: Bl***y Banks Again
Panda Tue 11 Dec - 11:54
Breaking News
Libor Scandal: SFO Arrests Three In UK
The Serious Fraud Office confirms it has made the first arrests in the UK over the Libor rate-rigging scandal.
11:46am UK, Tuesday 11 December 2012
The Libor scandal is expected to result in fines for banks world-wide
Its statement read: "Today the Serious Fraud Office (SFO), with the assistance of the City of London Police, executed search warrants at three residential premises in Surrey and Essex.
Three men, aged 33, 41 and 47, have been arrested and taken to a London police station for interview in connection with the investigation into the manipulation of Libor."
It concluded: "The men are all British nationals currently living in the United Kingdom."
The SFO's criminal inquiry began in July when it decided existing legislation gave it the scope to bring potential prosecutions.
Libor Scandal: SFO Arrests Three In UK
The Serious Fraud Office confirms it has made the first arrests in the UK over the Libor rate-rigging scandal.
11:46am UK, Tuesday 11 December 2012
The Libor scandal is expected to result in fines for banks world-wide
Its statement read: "Today the Serious Fraud Office (SFO), with the assistance of the City of London Police, executed search warrants at three residential premises in Surrey and Essex.
Three men, aged 33, 41 and 47, have been arrested and taken to a London police station for interview in connection with the investigation into the manipulation of Libor."
It concluded: "The men are all British nationals currently living in the United Kingdom."
The SFO's criminal inquiry began in July when it decided existing legislation gave it the scope to bring potential prosecutions.
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Re: Bl***y Banks Again
Badboy Wed 12 Dec - 0:40
HBOS HAS BEEN FINED FOR MONEY LAUNDERING.
NORTHERN ROCK ARE HAVING TO PAY COMPENSATION TO CUSTOMER,NOT SURE WHAT THAT IS ALL ABOUT
NORTHERN ROCK ARE HAVING TO PAY COMPENSATION TO CUSTOMER,NOT SURE WHAT THAT IS ALL ABOUT
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Re: Bl***y Banks Again
Panda Wed 12 Dec - 7:19
Badboy wrote:HBOS HAS BEEN FINED FOR MONEY LAUNDERING.
NORTHERN ROCK ARE HAVING TO PAY COMPENSATION TO CUSTOMER,NOT SURE WHAT THAT IS ALL ABOUT
NR probably had to pay for the PPI scandal , HBOS I don't know.......the Banks have proved how dishonest they are and will never have respect from Customers again.
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Re: Bl***y Banks Again
Badboy Wed 12 Dec - 17:02
IT SEEMS NORTHERN ROCK MISCALALCUTED THE INTEREST RATE ON REDIT REPAYMENT/MORTAGES OR SOMETHING,SO £270MILLION WILL TO BE PAID IN COMPENSATION,I DON'T THINK THE BANKS CAN HANDLE THEIR OWN SYSTEMS.Panda wrote:Badboy wrote:HBOS HAS BEEN FINED FOR MONEY LAUNDERING.
NORTHERN ROCK ARE HAVING TO PAY COMPENSATION TO CUSTOMER,NOT SURE WHAT THAT IS ALL ABOUT
NR probably had to pay for the PPI scandal , HBOS I don't know.......the Banks have proved how dishonest they are and will never have respect from Customers again.
AT THE RATE BANKS ARE PAYING OUT COMPENSATION,IT MIGHT OF WILL THE LAST PERSON OUT THE DOOR PLEASE TURN OFF THE LIGHTS.
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Re: Bl***y Banks Again
Panda Wed 12 Dec - 17:13
Has America got it in for British banks?
Britain’s banks may face more financial and reputational bruises in America next year.
In July, senior HSBC executives were hauled before a powerful Senate committee to explain the failures that stretched between 2004 and 2010 Photo: AP
By Richard Blackden, New York
6:30AM GMT 12 Dec 2012
As his audience at Manhattan’s Grand Hyatt hotel tucked into their three-course lunch on Monday, Sir Mervyn King explained why British banks need to raise billions of pounds more in capital.
The Governor of the Bank of England said one of the reasons was the rising cost of regulatory redress, a subject that he added was “topical”. The English understatement may have been lost on his audience from the Economics Club of New York but it was not by everyone.
Hours before Sir Mervyn stood up, Standard Chartered had agreed to pay $327m (£203m) to American authorities for alleged breaches of the country’s anti-money laundering rules.
HSBC’s record penalty caps a year in which US regulators have fined UK banks $3.4bn. The fines began in June, when Barclays paid $370m to settle charges that traders at the bank sought to manipulate Libor – one of the world’s most important interest rates.
As a turbulent 2012 draws to a close, it is not surprising that some in the City believe America has turned British banks into the equivalent of an ATM machine. It is a feeling sharpened by the explosive language that US authorities use in the battle for the next day’s headlines.
In July, a congressional investigation accused HSBC of letting “drug kingpins and rogue nations” launder money. A month later, the Department of Financial Services, a New York regulator, claimed Standard Chartered was behind a “staggering cover-up” involving $250bn of illegal transactions.
Mark Calabria, director of financial regulation at the Cato Institute, a think tank in Washington, says that the perception is understandable given the frequency and the size of the fines that have been levied since the summer.
However, he adds that, despite the intense competition between London and New York to be the world’s financial capital, US officials are not deliberately picking targets in the Square Mile.
“New York and London are the financial markets of the world. Everyone else is a bit player,” argues Calabria. “What that means is that if there are regulatory issues, it is likely to be with UK and US banks.”
What is also clear is that UK banks operating in the US face a more complicated and fragmented regulatory backdrop than they do in Britain, where the Bank of England is responsible for enforcing the rules.
At a national level in America, the Securities and Exchange Commission, the Commodity Futures Trading Commission (CFTC), the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency all have responsibility for regulating banks. Financial institutions with operations in the world’s biggest economy also need to contend with state regulators and, increasingly, the chief lawyers at a state level.
For some in America, the country’s regulators are at last beginning to do their jobs following lapses that helped to pave the way for the financial crisis. Having lambasted Wall Street when running for the White House in 2008, President Barack Obama still faces criticism that his administration has not done enough to toughen regulation and bring prosecutions.
In response to that pressure, the Financial Fraud Enforcement Task, an agency first established in 2009, created a new group in January designed to go after banks that mis-sold mortgage-backed bonds in the run-up to the crisis. JP Morgan became the group’s first target earlier this autumn.
Indeed, there were questions on Tuesday about why authorities did not bring a criminal prosecution given the scale of lapses they alleged at HSBC. Lanny Breuer, a senior prosecutor at the Department of Justice, signalled it was because such a move could ultimately have resulted in job losses at the bank and other "collateral" damage at the bank.
For others, new rules introduced since the crisis, combined with the small army of regulators, has left the biggest banks, including British ones, vulnerable.
“The environment is extremely hostile to large banks,” says Jerry Markham, a law professor at Florida International University and former prosecutor at the CFTC. “The regulators know that they [the banks] are big, fat cows that can easily be shot.’
Wherever you stand on the politics of regulating banks, there is little doubt that UK banks badly underestimated the importance of complying with anti-money laundering rules in the US. Of the $3.4bn in fines and forfeitures extracted this year, just over $2.5bn stem from breaches of anti-money laundering rules which, since the September 11 terrorist attacks, have also been used in Washington as a critical tool in thwarting terrorists.
Lloyds and Barclays were fined in 2009 and 2010 respectively for breaches of the anti-money laundering laws.
“Foreign banks in general are surprised at the level of seriousness with which it is taken,” says Ross Delton, an expert on anti-money laundering and former banking regulator. “US banks tend to hire compliance chiefs with experience on the government side.”
HSBC, for example, has hired two former senior US Treasury officials to run its legal and compliance departments.
If British lenders are feeling bruised from their US experience this year, Sandy Chen, a banking analyst at Cenkos in London, points out that the UK banks face an £11bn bill from mis-selling payment protection insurance in Britain. He argues “that is the context” in which the US fines need to be set.
But, with US regulators continuing to investigate Libor, as well as money laundering, Britain’s banks may face more financial and reputational bruises in America next year.
======================================
Shame on SIR Bernard king and the FSA for incompetence and lack of regulation of these Banks. Just think of the Banks
failing to lend to small businesses and repossesing Properties yet they can afford to pay £billions in fines.!!!!!
Britain’s banks may face more financial and reputational bruises in America next year.
In July, senior HSBC executives were hauled before a powerful Senate committee to explain the failures that stretched between 2004 and 2010 Photo: AP
By Richard Blackden, New York
6:30AM GMT 12 Dec 2012
As his audience at Manhattan’s Grand Hyatt hotel tucked into their three-course lunch on Monday, Sir Mervyn King explained why British banks need to raise billions of pounds more in capital.
The Governor of the Bank of England said one of the reasons was the rising cost of regulatory redress, a subject that he added was “topical”. The English understatement may have been lost on his audience from the Economics Club of New York but it was not by everyone.
Hours before Sir Mervyn stood up, Standard Chartered had agreed to pay $327m (£203m) to American authorities for alleged breaches of the country’s anti-money laundering rules.
On Tuesday, HSBC, Britain’s biggest bank, wrote a cheque for $1.9bn to US regulators to settle allegations that its failure to comply with anti-money laundering rules left America’s financial system exposed to Mexican drug cartels and terrorists.
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10 Dec 2012
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06 Dec 2012
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10 Dec 2012
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05 Dec 2012
HSBC’s record penalty caps a year in which US regulators have fined UK banks $3.4bn. The fines began in June, when Barclays paid $370m to settle charges that traders at the bank sought to manipulate Libor – one of the world’s most important interest rates.
As a turbulent 2012 draws to a close, it is not surprising that some in the City believe America has turned British banks into the equivalent of an ATM machine. It is a feeling sharpened by the explosive language that US authorities use in the battle for the next day’s headlines.
In July, a congressional investigation accused HSBC of letting “drug kingpins and rogue nations” launder money. A month later, the Department of Financial Services, a New York regulator, claimed Standard Chartered was behind a “staggering cover-up” involving $250bn of illegal transactions.
Mark Calabria, director of financial regulation at the Cato Institute, a think tank in Washington, says that the perception is understandable given the frequency and the size of the fines that have been levied since the summer.
However, he adds that, despite the intense competition between London and New York to be the world’s financial capital, US officials are not deliberately picking targets in the Square Mile.
“New York and London are the financial markets of the world. Everyone else is a bit player,” argues Calabria. “What that means is that if there are regulatory issues, it is likely to be with UK and US banks.”
What is also clear is that UK banks operating in the US face a more complicated and fragmented regulatory backdrop than they do in Britain, where the Bank of England is responsible for enforcing the rules.
At a national level in America, the Securities and Exchange Commission, the Commodity Futures Trading Commission (CFTC), the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency all have responsibility for regulating banks. Financial institutions with operations in the world’s biggest economy also need to contend with state regulators and, increasingly, the chief lawyers at a state level.
For some in America, the country’s regulators are at last beginning to do their jobs following lapses that helped to pave the way for the financial crisis. Having lambasted Wall Street when running for the White House in 2008, President Barack Obama still faces criticism that his administration has not done enough to toughen regulation and bring prosecutions.
In response to that pressure, the Financial Fraud Enforcement Task, an agency first established in 2009, created a new group in January designed to go after banks that mis-sold mortgage-backed bonds in the run-up to the crisis. JP Morgan became the group’s first target earlier this autumn.
Indeed, there were questions on Tuesday about why authorities did not bring a criminal prosecution given the scale of lapses they alleged at HSBC. Lanny Breuer, a senior prosecutor at the Department of Justice, signalled it was because such a move could ultimately have resulted in job losses at the bank and other "collateral" damage at the bank.
For others, new rules introduced since the crisis, combined with the small army of regulators, has left the biggest banks, including British ones, vulnerable.
“The environment is extremely hostile to large banks,” says Jerry Markham, a law professor at Florida International University and former prosecutor at the CFTC. “The regulators know that they [the banks] are big, fat cows that can easily be shot.’
Wherever you stand on the politics of regulating banks, there is little doubt that UK banks badly underestimated the importance of complying with anti-money laundering rules in the US. Of the $3.4bn in fines and forfeitures extracted this year, just over $2.5bn stem from breaches of anti-money laundering rules which, since the September 11 terrorist attacks, have also been used in Washington as a critical tool in thwarting terrorists.
Lloyds and Barclays were fined in 2009 and 2010 respectively for breaches of the anti-money laundering laws.
“Foreign banks in general are surprised at the level of seriousness with which it is taken,” says Ross Delton, an expert on anti-money laundering and former banking regulator. “US banks tend to hire compliance chiefs with experience on the government side.”
HSBC, for example, has hired two former senior US Treasury officials to run its legal and compliance departments.
If British lenders are feeling bruised from their US experience this year, Sandy Chen, a banking analyst at Cenkos in London, points out that the UK banks face an £11bn bill from mis-selling payment protection insurance in Britain. He argues “that is the context” in which the US fines need to be set.
But, with US regulators continuing to investigate Libor, as well as money laundering, Britain’s banks may face more financial and reputational bruises in America next year.
======================================
Shame on SIR Bernard king and the FSA for incompetence and lack of regulation of these Banks. Just think of the Banks
failing to lend to small businesses and repossesing Properties yet they can afford to pay £billions in fines.!!!!!
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Re: Bl***y Banks Again
Panda Thu 13 Dec - 9:55
Northern Rock To Refund Customers £270m After Paperwork Error
By Ruth Holliday Location: Newcastle
The state-owned arm of Northern Rock will pay out £270m in interest refunds after mistakes in letters it sent out to customers.
Around 152,000 people will receive an average of £1,775 each after the bank failed to give all the information required by law.
The Consumer Credit Act states that borrowers are not liable for interest if their lender has not provided the right information.
Since 2008, some letters and customer account statements from Northern Rock have had certain paragraphs of mandatory wording written incorrectly.
No customers have complained and the bank says it is not aware that anyone has been overcharged as a result of the error.
UK Asset Revolution, Northern Rock Asset Management's holding company, will now begin contacting potentially affected customers in writing with further information.
In a statement to Parliament, Treasury economic secretary Sajid Javid said the huge refund burden is likely to increase public sector net borrowing for 2012/2013.
But the costly mistake is "not expected to delay materially" the timing of NRAM's repayment of £19.6 billion of Government funding.
Speaking at Treasury questions, Chancellor George Osborne said customers who had loans below £25,000 were affected and blamed "an error originating in 2008 when Northern Rock was in public ownership".
He told the Commons: "Some customers with certain types of mainly unsecured personal loans were not given all the mandatory information in their statements which they were entitled to by law.
"As a result, interest payments on these loans are not legally enforceable."
The UKAR board has asked Deloitte to conduct an independent inquiry into the circumstances behind the error and to make recommendations on potential improvements to processes and controls.
UKAR chief executive Richard Banks said: "NRAM is acting in accordance with its legal responsibilities and we are determined to do the right thing for customers and the taxpayer.
"We will be writing to all customers who are affected and advising them on next steps. We have not received any complaints or claims as a result of this matter and as far as we are aware, it has not resulted in financial loss for customers."
By Ruth Holliday Location: Newcastle
The state-owned arm of Northern Rock will pay out £270m in interest refunds after mistakes in letters it sent out to customers.
Around 152,000 people will receive an average of £1,775 each after the bank failed to give all the information required by law.
The Consumer Credit Act states that borrowers are not liable for interest if their lender has not provided the right information.
Since 2008, some letters and customer account statements from Northern Rock have had certain paragraphs of mandatory wording written incorrectly.
No customers have complained and the bank says it is not aware that anyone has been overcharged as a result of the error.
UK Asset Revolution, Northern Rock Asset Management's holding company, will now begin contacting potentially affected customers in writing with further information.
In a statement to Parliament, Treasury economic secretary Sajid Javid said the huge refund burden is likely to increase public sector net borrowing for 2012/2013.
But the costly mistake is "not expected to delay materially" the timing of NRAM's repayment of £19.6 billion of Government funding.
Speaking at Treasury questions, Chancellor George Osborne said customers who had loans below £25,000 were affected and blamed "an error originating in 2008 when Northern Rock was in public ownership".
He told the Commons: "Some customers with certain types of mainly unsecured personal loans were not given all the mandatory information in their statements which they were entitled to by law.
"As a result, interest payments on these loans are not legally enforceable."
The UKAR board has asked Deloitte to conduct an independent inquiry into the circumstances behind the error and to make recommendations on potential improvements to processes and controls.
UKAR chief executive Richard Banks said: "NRAM is acting in accordance with its legal responsibilities and we are determined to do the right thing for customers and the taxpayer.
"We will be writing to all customers who are affected and advising them on next steps. We have not received any complaints or claims as a result of this matter and as far as we are aware, it has not resulted in financial loss for customers."
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Re: Bl***y Banks Again
malena stool Thu 13 Dec - 10:19
If these corrupt devious b'stards can send out reparations to customers who have not complained nor are aware of any wrongdoings and have not suffered any loss through a banking error, WHY do customers have to investigate if they qualify for and then apply for a refund of the £billions STOLEN deliberately and unjustly through the unethical and unprofessional application of unneeded PPI?
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Re: Bl***y Banks Again
Panda Thu 13 Dec - 10:33
Morning malena I would never have believed that Bank Management could be so corrupt !!!!!! The Pillars of responsibility and Respectability we all thought . Guess who will be paying for all these millions of $ the U.S. have fined them, yes, it's the Shareholder who receives a lower dividend and the saver who receives the lowest interest.....not the Board of Directors and Chairman.
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Re: Bl***y Banks Again
Panda Thu 13 Dec - 16:26
Latest Bank SCANDALS............
DeutscheBank has been ordered to pay a Client $49 million for mismanagement of his account which was administered by
Young Traders who covered up $12 Billion losses . The account made a profit the next year but the U.S. said that was not good enough.
UBS has been fined $1 billion , twice the sum of other banks and will shed 1,000 jobs. A couple of years ago UBS was fined in America for illegal practice and the Fed said if UBS supplied some names of U.S. accounts in their Swiss bank the fine would be void. USB provided about 20 names whose combined Swiss accounts totalled $100 million so the Fed demanded another 100 names.
It's not funny really and because all the Banks will be shedding jobs, the Housing Market will be affected and possibly repossessions.
DeutscheBank has been ordered to pay a Client $49 million for mismanagement of his account which was administered by
Young Traders who covered up $12 Billion losses . The account made a profit the next year but the U.S. said that was not good enough.
UBS has been fined $1 billion , twice the sum of other banks and will shed 1,000 jobs. A couple of years ago UBS was fined in America for illegal practice and the Fed said if UBS supplied some names of U.S. accounts in their Swiss bank the fine would be void. USB provided about 20 names whose combined Swiss accounts totalled $100 million so the Fed demanded another 100 names.
It's not funny really and because all the Banks will be shedding jobs, the Housing Market will be affected and possibly repossessions.
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Re: Bl***y Banks Again
Badboy Thu 13 Dec - 20:31
THERE'S AN EX-BANKER IN THE PROGRAMME BRITAIN'S HIDDEN HOUSING CRISIS.
WHATEVER NEXT WILL HAPPEN WITH BANKING BEING FINED LEFT,RIGHT AND CENTRE.
WHATEVER NEXT WILL HAPPEN WITH BANKING BEING FINED LEFT,RIGHT AND CENTRE.
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Re: Bl***y Banks Again
Panda Thu 13 Dec - 22:04
By Gordon Rayner, Chief Reporter
9:40PM GMT 13 Dec 2012
On Thursday, during a tour of the Bank of England, she effectively answered her own question as she talked about “lax” City workers and a regulator that “didn’t have the teeth” to intervene.
The Duke of Edinburgh, meanwhile, had a typically blunt piece of advice for the Bank’s executives: “Don’t do it again!”
The Queen and the Duke grilled Bank of England staff during a tour of a vault stacked with £27 billion worth of bullion.
Sujit Kapadia, one of the Bank’s financial policy experts, said he wanted to answer a question the Queen had asked academics at the London School of Economics in 2008 about why no one saw the financial crisis coming.
“Oh!” said the Queen, looking slightly taken aback.
9:40PM GMT 13 Dec 2012
On Thursday, during a tour of the Bank of England, she effectively answered her own question as she talked about “lax” City workers and a regulator that “didn’t have the teeth” to intervene.
The Duke of Edinburgh, meanwhile, had a typically blunt piece of advice for the Bank’s executives: “Don’t do it again!”
The Queen and the Duke grilled Bank of England staff during a tour of a vault stacked with £27 billion worth of bullion.
Sujit Kapadia, one of the Bank’s financial policy experts, said he wanted to answer a question the Queen had asked academics at the London School of Economics in 2008 about why no one saw the financial crisis coming.
“Oh!” said the Queen, looking slightly taken aback.
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Re: Bl***y Banks Again
Panda Sat 15 Dec - 9:00
'Sinister' FSA criticised by former HBOS chief Peter Cummings
The Financial Services Authority has been accused of “sinister” and “outrageous” behaviour in singling out HBOS director Peter Cummings for punishment and trying to mask its own failings in regulating Britain’s broken banks.
Image 1 of 2
Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry. Photo: Daniel Jones
Image 1 of 2
Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry. Photo: Daniel Jones
By Philip Aldrick
4:05PM GMT 14 Dec 2012
103 Comments
Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry.
Addressing a sub-committee of the Parliamentary Commission on Banking Standards (PCBS), he said: “We are not the only failed bank. There are at least four or five of them, and I find it curious that I was singled out. So someone, somewhere decided that that was the appropriate action. I think it is sinister and curious.”
Mr Cummings, who was interviewed at home in Scotland due to a serious illness, was fined £500,000 by the FSA in September and banned for life for his role in the HBOS collapse. His division caused £26bn of the £40bn-£50bn of losses the bank has recorded since 2008, according to the PCBS.
Lord Turnbull, the former Cabinet Secretary chairing the sub-committee, expressed some sympathy for Mr Cummings and raised concerns about the way the FSA has conducted itself.
“There is this extraordinary thing that you uniquely in this whole universe have been penalised,” he said, adding that the current FSA “mindset” is to “blacken someone’s reputation before they have fully studied it”. He described the regulator’s attitude as “outrageous”.
Related Articles
Mr Cummings conceded that the losses in his division were “horrendous”, saying: “Every day I look in the mirror and ask: what did I do wrong?” But he also argued that the costly decision to accelerate corporate lending in 2006 and 2007 was the collective judgement of the board, led by chief executive Andy Hornby and finance director Phil Hodkinson.
“There was a point where the retail bank was not performing and not delivering, and I was asked to step in,” he said, adding that he had not been happy about the decision at the time. He also rejected the idea that his division had its “head in the sand”, claiming his public optimism had been an attempt to maintain market confidence in the face of the spiralling crisis.
Mr Cummings said the FSA was “not interested” in his version of events and had even failed to interview “the relevant directors” before coming to its conclusions in September. He also revealed his lawyers believed the FSA penalty was “unlawful” and that, when confronted, the watchdog had reduced its fine from £800,000 to £500,000 on the condition that Mr Cummings did not appeal.
“I do think it bewildering and bizarre that in the space of a meeting and two phone calls – because they did not want me to take it to judicial review – they reduced the fine to £500,000,” he said.
“Frankly, it was like living in an American soap opera. I find it bewildering, bizarre and downright impossible to believe this country has an organisation that is out of control to the extent that it is. I think it is unacceptable behaviour.”
Despite being paid £2.3m in 2007 and drawing a £344,000 annual pension, he claimed: “I don’t have any money to pay my legal expenses.” Moreover, he and his wife had already decided he was too ill spend another two years fighting the ruling.
Seemingly accusing the FSA of double standards, the sub-committee heard and presented evidence showing the regulator never expressed concerns about “asset quality, concentration of risk, risk capital, and all of those matters that are set out in the two final notices”.
Rory Phillips QC for the sub-committee said: “What they were certainly not doing was to say, ‘Well, there are all of these problems’ – precisely the problems that are now listed in the final notice.”
Mr Cummings painted a picture of a regulator that was so weak it took its instructions from the bank. “I tell them what I am doing, and it gets fed back to me as, ‘This is what we want you to do’,” he said.
The response since the crisis has been an over-reaction, he added. “Fear of the regulator should have been a respect issue, rather than actually a fear,” Mr Cummings said. Lord Turnbull noted: “[Former FSA chief executive] Hector Sants at one stage said, ‘You should fear me’.”
Mr Cummings replied: “I think that is pretty appalling. I know he said that. I found that quite offensive and quite appalling.”
An FSA spokesman said that the regulator is currently conducting its own review into the HBOS failure, including into its own supervisory shortcomings.
The Financial Services Authority has been accused of “sinister” and “outrageous” behaviour in singling out HBOS director Peter Cummings for punishment and trying to mask its own failings in regulating Britain’s broken banks.
Image 1 of 2
Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry. Photo: Daniel Jones
Image 1 of 2
Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry. Photo: Daniel Jones
By Philip Aldrick
4:05PM GMT 14 Dec 2012
103 Comments Mr Cummings, the former chief executive of HBOS corporate, said it was “unfair and also a bit sinister” that he was the only director of a failed bank to have been fined and banned from the industry.
Addressing a sub-committee of the Parliamentary Commission on Banking Standards (PCBS), he said: “We are not the only failed bank. There are at least four or five of them, and I find it curious that I was singled out. So someone, somewhere decided that that was the appropriate action. I think it is sinister and curious.”
Mr Cummings, who was interviewed at home in Scotland due to a serious illness, was fined £500,000 by the FSA in September and banned for life for his role in the HBOS collapse. His division caused £26bn of the £40bn-£50bn of losses the bank has recorded since 2008, according to the PCBS.
Lord Turnbull, the former Cabinet Secretary chairing the sub-committee, expressed some sympathy for Mr Cummings and raised concerns about the way the FSA has conducted itself.
“There is this extraordinary thing that you uniquely in this whole universe have been penalised,” he said, adding that the current FSA “mindset” is to “blacken someone’s reputation before they have fully studied it”. He described the regulator’s attitude as “outrageous”.
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04 Dec 2012
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14 Dec 2012
Andrew Bailey: 'Not doing something is always regarded as brave'
14 Dec 2012
Barclays names Sants as compliance boss
12 Dec 2012
Mr Cummings conceded that the losses in his division were “horrendous”, saying: “Every day I look in the mirror and ask: what did I do wrong?” But he also argued that the costly decision to accelerate corporate lending in 2006 and 2007 was the collective judgement of the board, led by chief executive Andy Hornby and finance director Phil Hodkinson.
“There was a point where the retail bank was not performing and not delivering, and I was asked to step in,” he said, adding that he had not been happy about the decision at the time. He also rejected the idea that his division had its “head in the sand”, claiming his public optimism had been an attempt to maintain market confidence in the face of the spiralling crisis.
Mr Cummings said the FSA was “not interested” in his version of events and had even failed to interview “the relevant directors” before coming to its conclusions in September. He also revealed his lawyers believed the FSA penalty was “unlawful” and that, when confronted, the watchdog had reduced its fine from £800,000 to £500,000 on the condition that Mr Cummings did not appeal.
“I do think it bewildering and bizarre that in the space of a meeting and two phone calls – because they did not want me to take it to judicial review – they reduced the fine to £500,000,” he said.
“Frankly, it was like living in an American soap opera. I find it bewildering, bizarre and downright impossible to believe this country has an organisation that is out of control to the extent that it is. I think it is unacceptable behaviour.”
Despite being paid £2.3m in 2007 and drawing a £344,000 annual pension, he claimed: “I don’t have any money to pay my legal expenses.” Moreover, he and his wife had already decided he was too ill spend another two years fighting the ruling.
Seemingly accusing the FSA of double standards, the sub-committee heard and presented evidence showing the regulator never expressed concerns about “asset quality, concentration of risk, risk capital, and all of those matters that are set out in the two final notices”.
Rory Phillips QC for the sub-committee said: “What they were certainly not doing was to say, ‘Well, there are all of these problems’ – precisely the problems that are now listed in the final notice.”
Mr Cummings painted a picture of a regulator that was so weak it took its instructions from the bank. “I tell them what I am doing, and it gets fed back to me as, ‘This is what we want you to do’,” he said.
The response since the crisis has been an over-reaction, he added. “Fear of the regulator should have been a respect issue, rather than actually a fear,” Mr Cummings said. Lord Turnbull noted: “[Former FSA chief executive] Hector Sants at one stage said, ‘You should fear me’.”
Mr Cummings replied: “I think that is pretty appalling. I know he said that. I found that quite offensive and quite appalling.”
An FSA spokesman said that the regulator is currently conducting its own review into the HBOS failure, including into its own supervisory shortcomings.
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Re: Bl***y Banks Again
Panda Sat 15 Dec - 9:05
Andrew Bailey: 'Not doing something is always regarded as brave'
Andrew Bailey, chief executive of the Prudential Regulation Authority, explains why the hardest thing for a regulator is often to do nothing and how the EU is making a 'mistake' with its new bank rules.
Andrew Bailey admits that having told staff to get tougher on banks, it has been difficult to persuade them that a more subtle approach might work better Photo: Paul Grover
By Harry Wilson, Banking Correspondent
6:30AM GMT 14 Dec 2012
2 Comments
Luckily for Andrew Bailey, Easter Monday falls next year on April 1. Were it not for this fortuitous feature of the 2013 calendar, Britain’s top banking regulator would face the potential banana skin of launching the country’s new bank watchdog on April Fool’s Day.
The Prudential Regulation Authority (PRA), of which Mr Bailey will be the first chief executive, is intended to be the first line of defence in preventing the UK’s largest banks from ever returning to the point they reached four years ago, when their failure threatened to bring down the entire financial system.
As a veteran Bank of England official, Mr Bailey was a key member of the team that kept HBOS and Royal Bank of Scotland from dying on the operating table in 2008, and has more than two decades of experience working on bank failures, including the collapse of Barings merchant bank in 1995.
Sat in the Financial Services Authority’s office, where he has been working for more than a year as the head of prudential regulation, Mr Bailey is well aware of the challenges he faces.
“It has been quite interesting being in the FSA for the last 18 months as opposed to being at the Bank of England working with the FSA. It’s left me with a much clearer view that the regulatory model created around the FSA has struggled to create a balance between conduct and prudential in the same organisation.” From “light-touch” regulation to heavy-handed scare tactics, Britain’s banks have been on a roller-coaster ride of regulation since the crisis. With Mr Bailey in charge, the PRA will be arguably more powerful than the FSA ever was, but he insists his approach will be based more on focus and less on fear.
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“If you take intensive and intrusive literally, there is no end to it. Take one of the big banks, there are probably a dozen prudential supervisors working on a big bank, but you could have 120, you could have 200, of course in the US they do. There is no end to it, unless you are focused and able to apply judgment around that focus,” he says.
His influence has already been felt at the FSA. Gone is the blanket vetting of all director-level appointments brought in immediately after the crisis. Instead, regulators now focus their time interviewing only the most senior candidates, or those joining firms where supervisors have the most concerns.
Mr Bailey admits that having told staff to get tougher on banks, it has been difficult to persuade them that a more subtle approach might work better, particularly given their concern at being blamed for not doing enough to prevent a failure. “Not doing something is always regarded as brave,” he says.
The backdrop against which the PRA will begin life remains combustible, with international disagreements over banking regulations, a series of threats to financial stability, and the relentless lobbying of the banks themselves.
Europe, in particular, appears to be a bugbear for Mr Bailey and he says the moves to water down the Basel III capital rules are “disappointing”, while he describes European Union plans for detailed and proscriptive bank regulation as a “mistake”.
It is clear that he feels more affinity with his US peers as he talks wistfully of the Eighties and the British-American deal that was the basis of the original Basel rules that still underpin the US banking system.
“Just as was the case in the Eighties, there is a strong degree of agreement between the Fed and the UK authorities on issues of substance. I tend to find there is a natural alignment of view,” he says.
In recent weeks, Mr Bailey has come to public attention amid reports about the pressure he is placing on banks to ensure their bonus pools for 2012 are lower than the previous year.
However, he is keen to correct the impression that he spends his days berating bank bosses for paying their staff too much.
“I don’t, by the way, tend to ring people up and say 'get your bonuses down’. I’m not sure I’ve ever made that call. Contrary to public wisdom.”
That said, he is clear that the financial penalties imposed on banks over the last 12 months, most recently HSBC’s record $1.9bn (£1.2bn) fine over money-laundering, must be reflected in lower bonuses.
“Variable remuneration pools for the coming year should be calibrated to take account of the hits that an institution has taken,” he says.
Beyond financial penalties, Mr Bailey is clearly concerned at the potential for even more serious action being taken against banks and agrees that, like it or not, some major financial institutions are too big to prosecute.
“It [a criminal indictment] would be a very destabilising issue. It’s another version of the too important to fail.” So, too important to prosecute? “Yes.
“Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen yet and I’m not saying we are going to see... this is not an ordinary criminal indictment.”
Andrew Bailey, chief executive of the Prudential Regulation Authority, explains why the hardest thing for a regulator is often to do nothing and how the EU is making a 'mistake' with its new bank rules.
Andrew Bailey admits that having told staff to get tougher on banks, it has been difficult to persuade them that a more subtle approach might work better Photo: Paul Grover
By Harry Wilson, Banking Correspondent
6:30AM GMT 14 Dec 2012
2 Comments Luckily for Andrew Bailey, Easter Monday falls next year on April 1. Were it not for this fortuitous feature of the 2013 calendar, Britain’s top banking regulator would face the potential banana skin of launching the country’s new bank watchdog on April Fool’s Day.
The Prudential Regulation Authority (PRA), of which Mr Bailey will be the first chief executive, is intended to be the first line of defence in preventing the UK’s largest banks from ever returning to the point they reached four years ago, when their failure threatened to bring down the entire financial system.
As a veteran Bank of England official, Mr Bailey was a key member of the team that kept HBOS and Royal Bank of Scotland from dying on the operating table in 2008, and has more than two decades of experience working on bank failures, including the collapse of Barings merchant bank in 1995.
Sat in the Financial Services Authority’s office, where he has been working for more than a year as the head of prudential regulation, Mr Bailey is well aware of the challenges he faces.
“It has been quite interesting being in the FSA for the last 18 months as opposed to being at the Bank of England working with the FSA. It’s left me with a much clearer view that the regulatory model created around the FSA has struggled to create a balance between conduct and prudential in the same organisation.” From “light-touch” regulation to heavy-handed scare tactics, Britain’s banks have been on a roller-coaster ride of regulation since the crisis. With Mr Bailey in charge, the PRA will be arguably more powerful than the FSA ever was, but he insists his approach will be based more on focus and less on fear.
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14 Dec 2012
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11 Dec 2012
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11 Dec 2012
'UK banks must brace themselves for euro break-up'
24 Nov 2011
UK banks will be forced to hold extra £150bn capital
22 Oct 2012
“If you take intensive and intrusive literally, there is no end to it. Take one of the big banks, there are probably a dozen prudential supervisors working on a big bank, but you could have 120, you could have 200, of course in the US they do. There is no end to it, unless you are focused and able to apply judgment around that focus,” he says.
His influence has already been felt at the FSA. Gone is the blanket vetting of all director-level appointments brought in immediately after the crisis. Instead, regulators now focus their time interviewing only the most senior candidates, or those joining firms where supervisors have the most concerns.
Mr Bailey admits that having told staff to get tougher on banks, it has been difficult to persuade them that a more subtle approach might work better, particularly given their concern at being blamed for not doing enough to prevent a failure. “Not doing something is always regarded as brave,” he says.
The backdrop against which the PRA will begin life remains combustible, with international disagreements over banking regulations, a series of threats to financial stability, and the relentless lobbying of the banks themselves.
Europe, in particular, appears to be a bugbear for Mr Bailey and he says the moves to water down the Basel III capital rules are “disappointing”, while he describes European Union plans for detailed and proscriptive bank regulation as a “mistake”.
It is clear that he feels more affinity with his US peers as he talks wistfully of the Eighties and the British-American deal that was the basis of the original Basel rules that still underpin the US banking system.
“Just as was the case in the Eighties, there is a strong degree of agreement between the Fed and the UK authorities on issues of substance. I tend to find there is a natural alignment of view,” he says.
In recent weeks, Mr Bailey has come to public attention amid reports about the pressure he is placing on banks to ensure their bonus pools for 2012 are lower than the previous year.
However, he is keen to correct the impression that he spends his days berating bank bosses for paying their staff too much.
“I don’t, by the way, tend to ring people up and say 'get your bonuses down’. I’m not sure I’ve ever made that call. Contrary to public wisdom.”
That said, he is clear that the financial penalties imposed on banks over the last 12 months, most recently HSBC’s record $1.9bn (£1.2bn) fine over money-laundering, must be reflected in lower bonuses.
“Variable remuneration pools for the coming year should be calibrated to take account of the hits that an institution has taken,” he says.
Beyond financial penalties, Mr Bailey is clearly concerned at the potential for even more serious action being taken against banks and agrees that, like it or not, some major financial institutions are too big to prosecute.
“It [a criminal indictment] would be a very destabilising issue. It’s another version of the too important to fail.” So, too important to prosecute? “Yes.
“Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen yet and I’m not saying we are going to see... this is not an ordinary criminal indictment.”
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FED WANTS TO FORCE FOREIGN BANKS IN US TO HOLD MORE CAPITAL
Panda Sat 15 Dec - 13:32
Fed wants to force foreign banks in US to hold more capital
The Federal Reserve wants to force large foreign banks operating in the US to hold a larger financial cushion against unexpected losses.
The new rules would apply to roughly 107 foreign banks, as well as up to 27 foreign non-banking financial institutions Photo: Reuters
By Andrew Trotman
10:28PM GMT 14 Dec 2012
32 Comments The central bank has also proposed subjecting lenders such as Barclays to the same strict liquidity rules as their US counterparts and forcing them to undergo stress tests.
London-based Barclays and Germany’s Deutsche Bank are among global institutions with more than $50bn (£30.9bn) of assets that would be caught by the proposed measures.
The Fed is keen to expand regulations, brought in following the financial crisis four years ago, to overseas banks that have operations in the US.
The 2008 global crisis “revealed limitations on the ability of foreign banking organisations to act as a source of support to their US operations under stressed conditions”, the proposed regulations state.
“In the wake of the crisis, some home country regulatory authorities have restricted the ability of banking organisations based in their home country to provide support to host country subsidiaries. In addition, the capacity and willingness of governments to act as a backstop to their,” the Fed added.
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Re: Bl***y Banks Again
Panda Sun 16 Dec - 9:20
Economists warn Carney it is a mistake to change Bank's focus
The Bank of England has been warned off rethinking its inflation target by one of its own former policy makers, ahead of new figures which are expected to show prices are climbing once more.
Mark Carney, sparked suggestions that he may consider giving the Bank a growth or employment goal in addition to its official 2pc inflation target. Photo: REUTERS
By Emma Rowley
2:55PM GMT 15 Dec 2012
145 Comments
Officially switching the Bank’s focus would be a mistake, according to Andrew Sentance, a former member of the Bank’s Monetary Policy Committee (MPC) and now senior economic adviser at PwC.
His warning came after a speech from the new incoming governor, Mark Carney, sparked suggestions that he may consider giving the Bank a growth or employment goal in addition to its official 2pc inflation target.
The Daily Telegraph also reported that senior Government figures are privately pressing George Osborne to consider giving the Bank a new target of increasing the size of the economy.
However, with inflation having twice spiked to 5pc in recent years, Mr Sentance suggested that the Bank has already focused too closely on stimulating growth rather than fighting price rises. In coming months, he said, headline inflation “may well go above 3pc” again, because of global pressures.
“I think we can see since 2008 the Bank has exercised a lot of discretion. In my view, I think they have exercised a bit too much discretion and should have responded on some occasions to show that they do take the inflation target seriously,” he said.
Related Articles
“The argument for changing an inflation target is not very strong.”
A “drift away” from the target held a risk, he said, as “in the sixties and seventies what ultimately happened was the inflation gathered momentum and got out of control.”
While Mr Sentance said that was not what he expected to happen in the “next few years”, he warned that was the direction of concern when the target is ignored.
Another former member of the MPC, Kate Barker, said that it was right to think about chaging the monetary framework as previous history had shown the dangers of focusing too closely on one figure.
“The inflation target, which proved reasonably easy to meet over the first decade during which the MPC set interest rates, arguably caused policymakers to focus on inflation to the exclusion of worrying about broader economic imbalances,” she said.
“Therefore it is necessary to think again about what the monetary policy framework should be.”
Ms Barker said that an inflation range rather than single figure with more flexibility on the two year time horizon might be preferable. She argued though that she found the idea of a growth target unattractive.
“I find nominal GDP, including the level of nominal GDP, less attractive,” she said.
“Monetary policy does not determine the long-run growth rate, which is the result of labour market behaviour and other structural factors.”
Inflation is continuing to rise, official figures should show this week, with headline inflation reaching 2.8pc in November after increasing to 2.7pc the month before.
The latest expected increase will be due to rising energy bills and higher food prices, as a consequence of poor harvests around the world, according to Howard Archer, UK economist at IHS Global Insight.
He believes these factors will outweigh the impact of discounts on the high street in the run-up to Christmas, and that inflation will climb higher. Fears that the UK is heading into a “triple-dip” recession have recently been rising on the back of weak manufacturing data. However, last week’s official figures showed a bounce-back to growth in the construction sector in October, which raised hopes the UK can still avoid an economic contraction in the current quarter.
Retail sales have risen by just 0.3pc month-on-month in November, official figures are expected to show this week, after disappointingly falling by 0.8pc in October. More recent insight into the state of Christmas trading will come via the CBI’s distributive trade survey for December, which should show that sales are at least up compared to the previous year.
The Bank of England has been warned off rethinking its inflation target by one of its own former policy makers, ahead of new figures which are expected to show prices are climbing once more.
Mark Carney, sparked suggestions that he may consider giving the Bank a growth or employment goal in addition to its official 2pc inflation target. Photo: REUTERS
By Emma Rowley
2:55PM GMT 15 Dec 2012
145 Comments Officially switching the Bank’s focus would be a mistake, according to Andrew Sentance, a former member of the Bank’s Monetary Policy Committee (MPC) and now senior economic adviser at PwC.
His warning came after a speech from the new incoming governor, Mark Carney, sparked suggestions that he may consider giving the Bank a growth or employment goal in addition to its official 2pc inflation target.
The Daily Telegraph also reported that senior Government figures are privately pressing George Osborne to consider giving the Bank a new target of increasing the size of the economy.
However, with inflation having twice spiked to 5pc in recent years, Mr Sentance suggested that the Bank has already focused too closely on stimulating growth rather than fighting price rises. In coming months, he said, headline inflation “may well go above 3pc” again, because of global pressures.
“I think we can see since 2008 the Bank has exercised a lot of discretion. In my view, I think they have exercised a bit too much discretion and should have responded on some occasions to show that they do take the inflation target seriously,” he said.
Related Articles
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14 Dec 2012
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12 Dec 2012
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26 Nov 2012
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01 Dec 2012
“The argument for changing an inflation target is not very strong.”
A “drift away” from the target held a risk, he said, as “in the sixties and seventies what ultimately happened was the inflation gathered momentum and got out of control.”
While Mr Sentance said that was not what he expected to happen in the “next few years”, he warned that was the direction of concern when the target is ignored.
Another former member of the MPC, Kate Barker, said that it was right to think about chaging the monetary framework as previous history had shown the dangers of focusing too closely on one figure.
“The inflation target, which proved reasonably easy to meet over the first decade during which the MPC set interest rates, arguably caused policymakers to focus on inflation to the exclusion of worrying about broader economic imbalances,” she said.
“Therefore it is necessary to think again about what the monetary policy framework should be.”
Ms Barker said that an inflation range rather than single figure with more flexibility on the two year time horizon might be preferable. She argued though that she found the idea of a growth target unattractive.
“I find nominal GDP, including the level of nominal GDP, less attractive,” she said.
“Monetary policy does not determine the long-run growth rate, which is the result of labour market behaviour and other structural factors.”
Inflation is continuing to rise, official figures should show this week, with headline inflation reaching 2.8pc in November after increasing to 2.7pc the month before.
The latest expected increase will be due to rising energy bills and higher food prices, as a consequence of poor harvests around the world, according to Howard Archer, UK economist at IHS Global Insight.
He believes these factors will outweigh the impact of discounts on the high street in the run-up to Christmas, and that inflation will climb higher. Fears that the UK is heading into a “triple-dip” recession have recently been rising on the back of weak manufacturing data. However, last week’s official figures showed a bounce-back to growth in the construction sector in October, which raised hopes the UK can still avoid an economic contraction in the current quarter.
Retail sales have risen by just 0.3pc month-on-month in November, official figures are expected to show this week, after disappointingly falling by 0.8pc in October. More recent insight into the state of Christmas trading will come via the CBI’s distributive trade survey for December, which should show that sales are at least up compared to the previous year.
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Re: Bl***y Banks Again
Panda Mon 17 Dec - 0:05
16 December 2012 Last updated at 12:41
Barclays: US $470m energy fine 'unjustified'
Barclays has been hit by a series of scandals
Continue reading the main story
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Barclays has said US regulators' proposed fines of $470m (£291m) for the bank's alleged manipulation of energy markets are "unjustified" and the allegations will not stand up in court.
The Federal Energy Regulatory Commission (Ferc) has accused four Barclays traders of manipulating power prices in the US from 2006-2008.
Barclays denies the charges.
In a filing on Friday, the bank said Ferc's allegations were "based on an economically irrational theory".
The Office of Enforcement (OE), a branch of Ferc, allege the team of four traders exchanged messages explaining how they would use certain trades in one market to profit in another.
The traders are alleged to have manipulated power prices to make money with their financial swap positions, causing losses for rival power traders of $139m and winning the bank $34.9m.
'Hollow claims'
But Barclays said: "The underlying allegations are inconsistent with the facts and incorrectly rely on erroneous inferences drawn from mere fragments of documents.
"The investigative record, when read carefully and objectively, is plainly insufficient to establish each element of a violation of the Anti-Manipulation Rule by a preponderance of the evidence - the evidentiary standard the Commission will be required to meet in federal district court."
The bank went on: "OE's claims ring even more hollow because they are not accompanied by any explanation as to how OE arrived at its overstated and unjustified claims of disgorgement and civil penalties for Barclays.
"For these reasons, the Commission should terminate this proceeding without any further action."
Barclays' reputation has been hit by a series of scandals in recent months.
In June, it was fined £290m by UK and US regulators for attempting to manipulate Libor, an interbank lending rate which affects mortgages and loans.
In August, the Serious Fraud Office started an investigation into payments between Barclays' bank and Qatar Holding in 2008 when the bank was raising money in the Middle East during the banking crisis.
In the UK Barclays has also been part of the industry wide mis-selling of payment protection insurance (PPI) to individuals and the mis-selling of specialist insurance - called interest rate swaps - to small businesses
Barclays: US $470m energy fine 'unjustified'
Barclays has been hit by a series of scandals Continue reading the main story
Related Stories
Barclays has said US regulators' proposed fines of $470m (£291m) for the bank's alleged manipulation of energy markets are "unjustified" and the allegations will not stand up in court.
The Federal Energy Regulatory Commission (Ferc) has accused four Barclays traders of manipulating power prices in the US from 2006-2008.
Barclays denies the charges.
In a filing on Friday, the bank said Ferc's allegations were "based on an economically irrational theory".
The Office of Enforcement (OE), a branch of Ferc, allege the team of four traders exchanged messages explaining how they would use certain trades in one market to profit in another.
The traders are alleged to have manipulated power prices to make money with their financial swap positions, causing losses for rival power traders of $139m and winning the bank $34.9m.
'Hollow claims'
But Barclays said: "The underlying allegations are inconsistent with the facts and incorrectly rely on erroneous inferences drawn from mere fragments of documents.
"The investigative record, when read carefully and objectively, is plainly insufficient to establish each element of a violation of the Anti-Manipulation Rule by a preponderance of the evidence - the evidentiary standard the Commission will be required to meet in federal district court."
The bank went on: "OE's claims ring even more hollow because they are not accompanied by any explanation as to how OE arrived at its overstated and unjustified claims of disgorgement and civil penalties for Barclays.
"For these reasons, the Commission should terminate this proceeding without any further action."
Barclays' reputation has been hit by a series of scandals in recent months.
In June, it was fined £290m by UK and US regulators for attempting to manipulate Libor, an interbank lending rate which affects mortgages and loans.
In August, the Serious Fraud Office started an investigation into payments between Barclays' bank and Qatar Holding in 2008 when the bank was raising money in the Middle East during the banking crisis.
In the UK Barclays has also been part of the industry wide mis-selling of payment protection insurance (PPI) to individuals and the mis-selling of specialist insurance - called interest rate swaps - to small businesses
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Re: Bl***y Banks Again
Panda Mon 17 Dec - 0:20
Badboy wrote:FORGOT ABOUT ABOVE,CONCERNED CALIFORNIA
The americans are certainly making money from the Banks.....it is right they are taught a lesson , but now is the time they need liquidity more than ever.
I think the Vince Cable plan to seperate Investment Banks from ordinary Banking is right , but it's not due to start until 2016, another fudge by Cameron.
Last edited by Panda on Thu 20 Dec - 8:28; edited 1 time in total
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Re: Bl***y Banks Again
Panda Mon 17 Dec - 11:12
Parliamentary Banking Commission to call for banks to be broken up, rather than just ring-fenced
The Coalition’s financial reforms could be seriously challenged this week by demands from the banking commission for a far more radical overhaul of British lenders.
The Parliamentary Commission on Banking Standards is due to publish its first report on Friday Photo: Getty Images
By Louise Armitstead, Chief Business Correspondent
7:12PM GMT 16 Dec 2012
31 Comments
In a report due on Friday, which is thought to be more Volcker than Vickers, the Parliamentary Commission on Banking Standards is expected to call for legislation to be drafted that would allow the banks to be broken up, rather than just ring-fenced.
The report, which is a response to the Bank Reform Bill, is not yet finished, but members of the Commission are said to be determined to beef up the Coalition’s reforms in the wake of more fines and criticism of the sector.
UBS is braced for a fine of more than $1bn (£618m) in settlement with regulators investigating the global Libor rigging scandal. The penalty could be as high as $1.5bn, according to Swiss reports, and is expected to be unveiled this week.
Over the weekend it was also reported that the state-controlled Royal Bank of Scotland could be fined as much as £350m for its role in rate-rigging, although the settlement is not due until the new year.
Meanwhile Barclays, which has already paid a £290m Libor settlement, has been forced to defend itself from another $470m (£291m) penalty from America’s Federal Energy Regulatory Commission (FERC). In a defence filed in a US court on Friday night, Barclays said FERC’s claim that the bank had manipulated electricity markets was “baseless” and “hollow.”
Related Articles
George Osborne, who established the Banking Commission in July, recently warned it members against “unpicking a consensus” on his plans to ring-fence retail banking operations – as proposed by Sir John Vickers in his report.
But Andrew Tyrie, chairman of the Commission, is under pressure from members to toughen the proposals. The Tory MP is an admirer of Paul Volcker, the former chairman of the US Federal Reserve whom he credited with giving “extremely impressive evidence” on the separation of the banks.
During evidence sessions, Lord Lawson has pushed along the argument for total separation. Lord Turnbull, former head of the Civil Service, has also argued for radical reforms. However Mr Tyrie has also complained that the Commission is being rushed and needs more time.
Writing in The Daily Telegraph today, Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, has argued that as well as “cultural change, there needs to be structural change in banking.” Although he stops short of calling for a Volcker-style division of banks, Mr Horta Osorio argues that “financial stability will be greatly enhanced from an ex-ante separation of retail and investment banks”. He adds: “That is why I fully support ring-fencing as the right way forward.”
However business leaders have urged the Government not to put economic recovery above their reforms. Archie Norman, chairman of ITV, warned of “political indulgence” in pushing regulatory reforms. He told The Sunday Telegraph that “regulation and reserve capital does not come for free. It comes with a cost and the price of the attack on banks will be lower growth.”
The Coalition’s financial reforms could be seriously challenged this week by demands from the banking commission for a far more radical overhaul of British lenders.
The Parliamentary Commission on Banking Standards is due to publish its first report on Friday Photo: Getty Images
By Louise Armitstead, Chief Business Correspondent
7:12PM GMT 16 Dec 2012
31 Comments In a report due on Friday, which is thought to be more Volcker than Vickers, the Parliamentary Commission on Banking Standards is expected to call for legislation to be drafted that would allow the banks to be broken up, rather than just ring-fenced.
The report, which is a response to the Bank Reform Bill, is not yet finished, but members of the Commission are said to be determined to beef up the Coalition’s reforms in the wake of more fines and criticism of the sector.
UBS is braced for a fine of more than $1bn (£618m) in settlement with regulators investigating the global Libor rigging scandal. The penalty could be as high as $1.5bn, according to Swiss reports, and is expected to be unveiled this week.
Over the weekend it was also reported that the state-controlled Royal Bank of Scotland could be fined as much as £350m for its role in rate-rigging, although the settlement is not due until the new year.
Meanwhile Barclays, which has already paid a £290m Libor settlement, has been forced to defend itself from another $470m (£291m) penalty from America’s Federal Energy Regulatory Commission (FERC). In a defence filed in a US court on Friday night, Barclays said FERC’s claim that the bank had manipulated electricity markets was “baseless” and “hollow.”
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23 Sep 2012
Government is 'rushing' bank bill
10 Dec 2012
Banks 'should be split if they dodge ring-fence'
07 Nov 2012
'Sinister' FSA criticised by former HBOS boss
14 Dec 2012
George Osborne, who established the Banking Commission in July, recently warned it members against “unpicking a consensus” on his plans to ring-fence retail banking operations – as proposed by Sir John Vickers in his report.
But Andrew Tyrie, chairman of the Commission, is under pressure from members to toughen the proposals. The Tory MP is an admirer of Paul Volcker, the former chairman of the US Federal Reserve whom he credited with giving “extremely impressive evidence” on the separation of the banks.
During evidence sessions, Lord Lawson has pushed along the argument for total separation. Lord Turnbull, former head of the Civil Service, has also argued for radical reforms. However Mr Tyrie has also complained that the Commission is being rushed and needs more time.
Writing in The Daily Telegraph today, Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, has argued that as well as “cultural change, there needs to be structural change in banking.” Although he stops short of calling for a Volcker-style division of banks, Mr Horta Osorio argues that “financial stability will be greatly enhanced from an ex-ante separation of retail and investment banks”. He adds: “That is why I fully support ring-fencing as the right way forward.”
However business leaders have urged the Government not to put economic recovery above their reforms. Archie Norman, chairman of ITV, warned of “political indulgence” in pushing regulatory reforms. He told The Sunday Telegraph that “regulation and reserve capital does not come for free. It comes with a cost and the price of the attack on banks will be lower growth.”
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Re: Bl***y Banks Again
Panda Thu 20 Dec - 1:13
US charges two former UBS traders over Libor manipulation
The Department of Justice has charged two former UBS traders with conspiracy to manipulate Libor, on the same day the Swiss banking giant agreed to pay £940m in fines to settle charges linked to the key global interest rate.
15 Comments
UBS fined £940m for rigging Libor, fraud and bribes
How UBS built its Libor racket
How will the libor scandal affect borrowers?
UBS trader: 'I’ll pay you $100,000 ... whatever you want' to rig rate
Timeline: How the Libor scandal unfolded
================================
UBS is one of the biggest Banks in the world and this Swiss Bank , as you can imagine was very popular with those
wishing to hide money. Apparently the LIBOR scandal will be ongoing for some time and the US are to be commended for investigating this scandal, unlike Britain who was supposed to be the financial centre of the World.
Now the Investment Companies and Councils are queuing up to sue the guilty Banks .
The Department of Justice has charged two former UBS traders with conspiracy to manipulate Libor, on the same day the Swiss banking giant agreed to pay £940m in fines to settle charges linked to the key global interest rate.
15 Comments
UBS fined £940m for rigging Libor, fraud and bribes
How UBS built its Libor racket
How will the libor scandal affect borrowers?
UBS trader: 'I’ll pay you $100,000 ... whatever you want' to rig rate
Timeline: How the Libor scandal unfolded
================================
UBS is one of the biggest Banks in the world and this Swiss Bank , as you can imagine was very popular with those
wishing to hide money. Apparently the LIBOR scandal will be ongoing for some time and the US are to be commended for investigating this scandal, unlike Britain who was supposed to be the financial centre of the World.
Now the Investment Companies and Councils are queuing up to sue the guilty Banks .
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Re: Bl***y Banks Again
Panda Thu 20 Dec - 2:24
US charges two former UBS traders over Libor manipulation
The Department of Justice has charged two former UBS traders with conspiracy to manipulate Libor, on the same day the Swiss banking giant agreed to pay £940m in fines to settle charges linked to the key global interest rate.
560
315
TelegraphPlayer_9755502
By Telegraph Staff, and agencies
7:30PM GMT 19 Dec 2012
15 Comments
Tom Alexander William Hayes, 33-year-old British former Tokyo-based trader, and Roger Darin, a Switzerland-based managing director responsible for the bank’s Libor submissions, were both charged with conspiracy, the US Justice Department said. Hayes was also charged with wire fraud and a "price-fixing violation arising from his collusive activity with another bank to manipulate Libor".
Mr Hayes’ official naming followed his arrest last week by the Serious Fraud Office in connection with its own investigation into Libor-rigging. Two other men, both brokers in the City, were also arrested.
Mr Hayes, was described by the US investigators as one of UBS’s most successful Yen derivatives traders and was said to have generated profits for the bank in the three years before he left in September 2009 of $236m. The size of his profits meant the banker could have earned anything up to $20m over the period based on the way banks pay their top traders.
The charges came after UBS agreed to pay £940m to regulators in order to settle charges of manipulating Libor interest rates, fraud and paying bribes to brokers.
The penalty is the second-largest fine paid by a bank and is more than three times the £290m fine levied on Barclays in June for attempting to rig the Libor benchmark rate used to price financial contracts around the world.
Related Articles
UBS' 1.4bn Swiss franc (£940m) fine includes a £160m payment to the Financial Services Authority, the largest penalty ever levied by the British watchdog, $1.2bn paid to US authorities and a 59m Swiss franc 'disgorgement of profits' order from the Swiss.
As part of the settlement, UBS' Japanese arm has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen Libor.
The steep fine for UBS is despite the bank, since 2011, cooperating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.
In a statement on Wednesday, UBS said that certain personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions".
"Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions," UBS added.
The bank said that this conduct related to seven benchmark interest rates, although the nature and extent of the behaviour in question varied significantly from one currency to another.
UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee."
"We have cooperated fully with the authorities and taken decisive and appropriate actions to correct the issues and to strengthen our control processes and procedures," he added.
"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”
The FSA said at least 45 people were involved in or were aware of the rigging and that the breaches occurred over a five-year period between January 2005 and December 2010.
The watchdog described the misconduct as "extensive and widespread", with at least 2,000 requests for inappropriate submissions documented and "unquantifiable" number of oral requests.
In its final notice to UBS, the FSA details some of the interactions, saying that "in the course of one campaign of manipulation", a UBS trader agreed with his counterpart that he would attempt to manipulate UBS' submissions in "small drops" in order to avoid arousing suspicion.
The FSA added that the "total disregard for proper standards by these traders and brokers" is clear from documented communications in which they referred to each other in "congratulatory and exhortatory terms" such as "the three muscateers [sic]", "superman" and "be a hero today".
In one example, the FSA quotes a UBS trader saying: “if you keep 6s [the six-month yen Libor rate] unchanged today ... I will [expletive] do one humongous deal with you ... Like a 50,000 buck deal, whatever ... I need you to keep it as low as possible ... if you do that .... I’ll pay you, you know, 50,000 dollars, 100,000 dollars... whatever you want ... I’m a man of my word.”
Its final notice also revealed that UBS made "corrupt payments" of £15,000 per quarter to brokers to reward them for helping the Swiss bank manipulate interest rates.
Tracey McDermott, FSA director of enforcement and financial crime, said: “The findings we have set out in our notice today do not make for pretty reading."
"The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this," she added.
"They manipulated UBS’s submissions in order to benefit their own positions and to protect UBS’s reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor. "
Lord Myners, the former City minister, told Radio 4's Today programme: "This fine is peanuts to UBS". He called for a fundamental change in bank leadership and for banks to be broken up.
The Department of Justice has charged two former UBS traders with conspiracy to manipulate Libor, on the same day the Swiss banking giant agreed to pay £940m in fines to settle charges linked to the key global interest rate.
560
315
TelegraphPlayer_9755502
By Telegraph Staff, and agencies
7:30PM GMT 19 Dec 2012
15 Comments Tom Alexander William Hayes, 33-year-old British former Tokyo-based trader, and Roger Darin, a Switzerland-based managing director responsible for the bank’s Libor submissions, were both charged with conspiracy, the US Justice Department said. Hayes was also charged with wire fraud and a "price-fixing violation arising from his collusive activity with another bank to manipulate Libor".
Mr Hayes’ official naming followed his arrest last week by the Serious Fraud Office in connection with its own investigation into Libor-rigging. Two other men, both brokers in the City, were also arrested.
Mr Hayes, was described by the US investigators as one of UBS’s most successful Yen derivatives traders and was said to have generated profits for the bank in the three years before he left in September 2009 of $236m. The size of his profits meant the banker could have earned anything up to $20m over the period based on the way banks pay their top traders.
The charges came after UBS agreed to pay £940m to regulators in order to settle charges of manipulating Libor interest rates, fraud and paying bribes to brokers.
The penalty is the second-largest fine paid by a bank and is more than three times the £290m fine levied on Barclays in June for attempting to rig the Libor benchmark rate used to price financial contracts around the world.
Related Articles
UBS fined over Libor rigging: UBS full statement
19 Dec 2012
UBS case 'shows why FSA is being dismantled'
19 Dec 2012
'Be a hero today': Key points from FSA dossier on UBS
19 Dec 2012
UBS close to $1bn Libor settlement - report
13 Dec 2012
Three arrested in SFO Libor-rigging investigation
11 Dec 2012
Andrew Bailey: 'Not doing something is always regarded as brave'
14 Dec 2012
UBS' 1.4bn Swiss franc (£940m) fine includes a £160m payment to the Financial Services Authority, the largest penalty ever levied by the British watchdog, $1.2bn paid to US authorities and a 59m Swiss franc 'disgorgement of profits' order from the Swiss.
As part of the settlement, UBS' Japanese arm has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen Libor.
The steep fine for UBS is despite the bank, since 2011, cooperating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.
In a statement on Wednesday, UBS said that certain personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions".
"Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions," UBS added.
The bank said that this conduct related to seven benchmark interest rates, although the nature and extent of the behaviour in question varied significantly from one currency to another.
UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee."
"We have cooperated fully with the authorities and taken decisive and appropriate actions to correct the issues and to strengthen our control processes and procedures," he added.
"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”
The FSA said at least 45 people were involved in or were aware of the rigging and that the breaches occurred over a five-year period between January 2005 and December 2010.
The watchdog described the misconduct as "extensive and widespread", with at least 2,000 requests for inappropriate submissions documented and "unquantifiable" number of oral requests.
In its final notice to UBS, the FSA details some of the interactions, saying that "in the course of one campaign of manipulation", a UBS trader agreed with his counterpart that he would attempt to manipulate UBS' submissions in "small drops" in order to avoid arousing suspicion.
The FSA added that the "total disregard for proper standards by these traders and brokers" is clear from documented communications in which they referred to each other in "congratulatory and exhortatory terms" such as "the three muscateers [sic]", "superman" and "be a hero today".
In one example, the FSA quotes a UBS trader saying: “if you keep 6s [the six-month yen Libor rate] unchanged today ... I will [expletive] do one humongous deal with you ... Like a 50,000 buck deal, whatever ... I need you to keep it as low as possible ... if you do that .... I’ll pay you, you know, 50,000 dollars, 100,000 dollars... whatever you want ... I’m a man of my word.”
Its final notice also revealed that UBS made "corrupt payments" of £15,000 per quarter to brokers to reward them for helping the Swiss bank manipulate interest rates.
Tracey McDermott, FSA director of enforcement and financial crime, said: “The findings we have set out in our notice today do not make for pretty reading."
"The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this," she added.
"They manipulated UBS’s submissions in order to benefit their own positions and to protect UBS’s reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor. "
Lord Myners, the former City minister, told Radio 4's Today programme: "This fine is peanuts to UBS". He called for a fundamental change in bank leadership and for banks to be broken up.
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Panda Thu 20 Dec - 8:23
Hong Kong joins UBS Libor rigging probe as US charges two ex-traders at bank with conspiracy to manipulate rate
Hong Kong is to investigate possible Libor rigging by UBS, a day after the Swiss bank agreed to pay £940m to regulators for trying to manipulate the key rate on an "epic scale" and two former traders at the bank were charged with conspiracy.
Photo: Reuters
By Telegraph Staff, and agencies
7:40AM GMT 20 Dec 2012
1 Comment
The Hong Kong Monetary Authority, the city's de facto central bank, said it has received information from overseas regulators about "possible misconduct" by UBS involving submissions for the city's interbank rate, known as Hibor, and other reference rates in Asia.
UBS was fined by Swiss, British and US regulators on Wednesday after an investigation revealed evidence of massive misconduct in the setting of the London interbank offered rate (Libor), a global reference that affects trillions of dollars of loans and mortgages.
The penalty is the second-largest banking fine ever.
The Hong Kong Monetary Authority said it had "commenced an investigation to assess whether the potential misconduct had any material impact on Hibor, which is considered a key benchmark interest rate for economies in the region.
It will work with overseas regulators to gather information and "consider further actions that need to be taken" pending the findings of the investigation.
Related Articles
Tom Alexander William Hayes, 33-year-old British former Tokyo-based trader, and Roger Darin, a Switzerland-based managing director responsible for the bank’s Libor submissions, were both charged with conspiracy, the US Justice Department said.
They are the first to face criminal charges in the investigation into Libor manipulation by global regulators.
Mr Hayes was also charged with wire fraud and a "price-fixing violation arising from his collusive activity with another bank to manipulate Libor".
He was one of three men arrested last week by the Serious Fraud Office in connection with its own investigation into Libor-rigging.
Mr Hayes, was described by the US investigators as one of UBS’s most successful yen derivatives traders and was said to have generated profits for the bank in the three years before he left in September 2009 of $236m. The size of his profits meant the banker could have earned anything up to $20m over the period based on the way banks pay their top traders.
UBS's fine is more than three times the £290m fine levied on Barclays in June for attempting to rig the Libor benchmark rate used to price financial contracts around the world.
It includes a £160m payment to the Financial Services Authority, the largest penalty ever levied by the British watchdog, $1.2bn paid to US authorities and a 59m Swiss franc 'disgorgement of profits' order from the Swiss.
As part of the settlement, UBS' Japanese arm has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including yen Libor.
The steep fine for UBS is despite the bank, since 2011, co-operating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.
In a statement on Wednesday, UBS said that certain personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions".
"Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions," UBS added.
The bank said that this conduct related to seven benchmark interest rates, although the nature and extent of the behaviour in question varied significantly from one currency to another.
UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee."
"We have co-operated fully with the authorities and taken decisive and appropriate actions to correct the issues and to strengthen our control processes and procedures," he added.
"We deeply regret this inappropriate and unethical behaviour. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”
The FSA said at least 45 people were involved in or were aware of the rigging and that the breaches occurred over a five-year period between January 2005 and December 2010.
The watchdog described the misconduct as "extensive and widespread", with at least 2,000 requests for inappropriate submissions documented and "unquantifiable" number of oral requests.
In its final notice to UBS, the FSA details some of the interactions, saying that "in the course of one campaign of manipulation", a UBS trader agreed with his counterpart that he would attempt to manipulate UBS' submissions in "small drops" in order to avoid arousing suspicion.
The FSA added that the "total disregard for proper standards by these traders and brokers" is clear from documented communications in which they referred to each other in "congratulatory and exhortatory terms" such as "the three muscateers [sic]", "superman" and "be a hero today".
In one example, the FSA quotes a UBS trader saying: “if you keep 6s [the six-month yen Libor rate] unchanged today ... I will [expletive] do one humongous deal with you ... Like a 50,000 buck deal, whatever ... I need you to keep it as low as possible ... if you do that ... I’ll pay you, you know, 50,000 dollars, 100,000 dollars ... whatever you want ... I’m a man of my word.”
Its final notice also revealed that UBS made "corrupt payments" of £15,000 per quarter to brokers to reward them for helping the Swiss bank manipulate interest rates.
Tracey McDermott, FSA director of enforcement and financial crime, said: “The findings we have set out in our notice today do not make for pretty reading."
"The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this," she added.
"They manipulated UBS’s submissions in order to benefit their own positions and to protect UBS’s reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor. "
Libor Scandal
In Finance »
Top 10 coolest offices in the UK
In Libor Scandal
Libor scandal: timeline
Libor reform: Main points in Martin Wheatley's review
Origins of the scandal - in pictures
Libor-rigging bankers should be jailed, survey finds
==============================
"UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee" As if.....!!
Apparently Fanny Mae and the other major U.S. Mortgage Bank are to take action against the Banks which affected their
Mortgage rates.
Hong Kong is to investigate possible Libor rigging by UBS, a day after the Swiss bank agreed to pay £940m to regulators for trying to manipulate the key rate on an "epic scale" and two former traders at the bank were charged with conspiracy.
Photo: Reuters
By Telegraph Staff, and agencies
7:40AM GMT 20 Dec 2012
1 Comment The Hong Kong Monetary Authority, the city's de facto central bank, said it has received information from overseas regulators about "possible misconduct" by UBS involving submissions for the city's interbank rate, known as Hibor, and other reference rates in Asia.
UBS was fined by Swiss, British and US regulators on Wednesday after an investigation revealed evidence of massive misconduct in the setting of the London interbank offered rate (Libor), a global reference that affects trillions of dollars of loans and mortgages.
The penalty is the second-largest banking fine ever.
The Hong Kong Monetary Authority said it had "commenced an investigation to assess whether the potential misconduct had any material impact on Hibor, which is considered a key benchmark interest rate for economies in the region.
It will work with overseas regulators to gather information and "consider further actions that need to be taken" pending the findings of the investigation.
Related Articles
How UBS built its Libor racket
19 Dec 2012
UBS trader: 'I’ll pay you $100,000 ... whatever you want' to rig rate
19 Dec 2012
How will the libor scandal affect borrowers?
19 Dec 2012
'Be a hero today': Key points from FSA dossier on UBS
19 Dec 2012
Timeline: How the Libor scandal unfolded
19 Dec 2012
UBS case 'shows why FSA is being dismantled'
19 Dec 2012
Tom Alexander William Hayes, 33-year-old British former Tokyo-based trader, and Roger Darin, a Switzerland-based managing director responsible for the bank’s Libor submissions, were both charged with conspiracy, the US Justice Department said.
They are the first to face criminal charges in the investigation into Libor manipulation by global regulators.
Mr Hayes was also charged with wire fraud and a "price-fixing violation arising from his collusive activity with another bank to manipulate Libor".
He was one of three men arrested last week by the Serious Fraud Office in connection with its own investigation into Libor-rigging.
Mr Hayes, was described by the US investigators as one of UBS’s most successful yen derivatives traders and was said to have generated profits for the bank in the three years before he left in September 2009 of $236m. The size of his profits meant the banker could have earned anything up to $20m over the period based on the way banks pay their top traders.
UBS's fine is more than three times the £290m fine levied on Barclays in June for attempting to rig the Libor benchmark rate used to price financial contracts around the world.
It includes a £160m payment to the Financial Services Authority, the largest penalty ever levied by the British watchdog, $1.2bn paid to US authorities and a 59m Swiss franc 'disgorgement of profits' order from the Swiss.
As part of the settlement, UBS' Japanese arm has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including yen Libor.
The steep fine for UBS is despite the bank, since 2011, co-operating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.
In a statement on Wednesday, UBS said that certain personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions".
"Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions," UBS added.
The bank said that this conduct related to seven benchmark interest rates, although the nature and extent of the behaviour in question varied significantly from one currency to another.
UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee."
"We have co-operated fully with the authorities and taken decisive and appropriate actions to correct the issues and to strengthen our control processes and procedures," he added.
"We deeply regret this inappropriate and unethical behaviour. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”
The FSA said at least 45 people were involved in or were aware of the rigging and that the breaches occurred over a five-year period between January 2005 and December 2010.
The watchdog described the misconduct as "extensive and widespread", with at least 2,000 requests for inappropriate submissions documented and "unquantifiable" number of oral requests.
In its final notice to UBS, the FSA details some of the interactions, saying that "in the course of one campaign of manipulation", a UBS trader agreed with his counterpart that he would attempt to manipulate UBS' submissions in "small drops" in order to avoid arousing suspicion.
The FSA added that the "total disregard for proper standards by these traders and brokers" is clear from documented communications in which they referred to each other in "congratulatory and exhortatory terms" such as "the three muscateers [sic]", "superman" and "be a hero today".
In one example, the FSA quotes a UBS trader saying: “if you keep 6s [the six-month yen Libor rate] unchanged today ... I will [expletive] do one humongous deal with you ... Like a 50,000 buck deal, whatever ... I need you to keep it as low as possible ... if you do that ... I’ll pay you, you know, 50,000 dollars, 100,000 dollars ... whatever you want ... I’m a man of my word.”
Its final notice also revealed that UBS made "corrupt payments" of £15,000 per quarter to brokers to reward them for helping the Swiss bank manipulate interest rates.
Tracey McDermott, FSA director of enforcement and financial crime, said: “The findings we have set out in our notice today do not make for pretty reading."
"The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this," she added.
"They manipulated UBS’s submissions in order to benefit their own positions and to protect UBS’s reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor. "
| ||||||
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Libor Scandal
In Finance »
Top 10 coolest offices in the UK
In Libor Scandal
Libor scandal: timeline
Libor reform: Main points in Martin Wheatley's review
Origins of the scandal - in pictures
Libor-rigging bankers should be jailed, survey finds
==============================
"UBS chief executive Sergio Ermotti said: “During the course of these investigations, we discovered behaviour of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee" As if.....!!
Apparently Fanny Mae and the other major U.S. Mortgage Bank are to take action against the Banks which affected their
Mortgage rates.
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Re: Bl***y Banks Again
Panda Fri 21 Dec - 21:27
MPs look to crack down on banks selling interest rate swaps
The sale by retail banks of controversial interest rate hedging products could be limited under plans by MPs and peers to look further at the way derivatives have been sold to small businesses.
Barclays, HSBC and Royal Bank of Scotland have together put aside more than £600m against possible compensation for victims of mis-selling Photo: PA
By Harry Wilson, Banking Correspondent
8:56PM GMT 21 Dec 2012
1 Comment
The Commission on Banking Standards has said it will investigate the “control of the sale of derivatives to prevent mis-selling” in the new year as it works on its final report on culture and ethics at major lenders.
More than 40,000 interest rate derivatives are estimated to have been sold to smaller and medium sized businesses by banks in the past decade, according to the Financial Services Authority. Barclays, HSBC and Royal Bank of Scotland have together put aside more than £600m against possible compensation for victims of mis-selling.
Staff at the FSA are reviewing the sale of a small number of the products ahead of the launch next year of a compensation scheme for businesses mis-sold swaps.
Vince Cable, the Business Secretary, said he thought banks had “behaved extremely badly” and he would intervene in the scandal.
“I have taken a personal interest in this. The FSA is now trying to deal with this… It’s a massive scandal and I’m hoping that over the next few weeks there will be a proper set of goals. We want genuine justice for those small companies,” he told Channel 4.
Related Articles
In a report published on Friday, the Commission said: “Banks have argued that a prohibition would result in consumer detriment, but selling derivatives to SMEs has been a highly profitable activity for them and investigations of mis-selling of interest rate swaps demonstrate the risk this poses to trust between banks and their customers.”
Among the changes to be looked at will be proposals to ban the ring-fenced retail banks that will be created by the Government’s Bank Reform Bill from selling derivatives. However, the Commission cautioned that it did not believe this was likely to be the “best tool” to prevent further mis-selling.
Senior financiers have warned that attempts to strengthen the ring-fence are likely to fail.
Jon Moulton, founder of Better Capital, said trying to stop banks gaming the system was “like trying to control POWs in Colditz”.
“You are going to have regulators to try to administer this big tough electric fence. Bright people fighting and an impossible task rather like trying to control POWs in Colditz. Why bother. It’s just going to be futile,” he said.
News of the Commission’s investigation into swap sales came as RBS won a case brought against it by a catering company for mis-selling an interest rate derivative.
On Friday, Green & Rowley had its claim for mis-selling against RBS dismissed and was ordered to pay the bank’s costs of £175,000.
Paul Rowley, a Lancashire-based restaurateur, said he was “absolutely gutted” and would be considering his legal options. Mr Rowley’s case is the first for swap mis-selling to go through a full trial in an English court and experts were yesterday studying the verdict to assess its significance in setting a precedent.
Several other cases have been brought against banks, but these have generally settled out of court.
The sale by retail banks of controversial interest rate hedging products could be limited under plans by MPs and peers to look further at the way derivatives have been sold to small businesses.
Barclays, HSBC and Royal Bank of Scotland have together put aside more than £600m against possible compensation for victims of mis-selling Photo: PA
By Harry Wilson, Banking Correspondent
8:56PM GMT 21 Dec 2012
1 Comment The Commission on Banking Standards has said it will investigate the “control of the sale of derivatives to prevent mis-selling” in the new year as it works on its final report on culture and ethics at major lenders.
More than 40,000 interest rate derivatives are estimated to have been sold to smaller and medium sized businesses by banks in the past decade, according to the Financial Services Authority. Barclays, HSBC and Royal Bank of Scotland have together put aside more than £600m against possible compensation for victims of mis-selling.
Staff at the FSA are reviewing the sale of a small number of the products ahead of the launch next year of a compensation scheme for businesses mis-sold swaps.
Vince Cable, the Business Secretary, said he thought banks had “behaved extremely badly” and he would intervene in the scandal.
“I have taken a personal interest in this. The FSA is now trying to deal with this… It’s a massive scandal and I’m hoping that over the next few weeks there will be a proper set of goals. We want genuine justice for those small companies,” he told Channel 4.
Related Articles
Cable warns of 'uncertainty' if bank debate is reopened
21 Dec 2012
Electric ring fence for banks 'like trying to control POWs in Colditz'
21 Dec 2012
Banks report better than expected year for mortgages
20 Dec 2012
In a report published on Friday, the Commission said: “Banks have argued that a prohibition would result in consumer detriment, but selling derivatives to SMEs has been a highly profitable activity for them and investigations of mis-selling of interest rate swaps demonstrate the risk this poses to trust between banks and their customers.”
Among the changes to be looked at will be proposals to ban the ring-fenced retail banks that will be created by the Government’s Bank Reform Bill from selling derivatives. However, the Commission cautioned that it did not believe this was likely to be the “best tool” to prevent further mis-selling.
Senior financiers have warned that attempts to strengthen the ring-fence are likely to fail.
Jon Moulton, founder of Better Capital, said trying to stop banks gaming the system was “like trying to control POWs in Colditz”.
“You are going to have regulators to try to administer this big tough electric fence. Bright people fighting and an impossible task rather like trying to control POWs in Colditz. Why bother. It’s just going to be futile,” he said.
News of the Commission’s investigation into swap sales came as RBS won a case brought against it by a catering company for mis-selling an interest rate derivative.
On Friday, Green & Rowley had its claim for mis-selling against RBS dismissed and was ordered to pay the bank’s costs of £175,000.
Paul Rowley, a Lancashire-based restaurateur, said he was “absolutely gutted” and would be considering his legal options. Mr Rowley’s case is the first for swap mis-selling to go through a full trial in an English court and experts were yesterday studying the verdict to assess its significance in setting a precedent.
Several other cases have been brought against banks, but these have generally settled out of court.
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Re: Bl***y Banks Again
Badboy Fri 21 Dec - 21:38
QUESTION;HOW MUCH MONEY WILL BANKS HAVE LEFT AFTER PAYING FINES AND/OR COMPENSATION.
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Re: Bl***y Banks Again
malena stool Fri 21 Dec - 21:54
Quote
"Vince Cable, the Business Secretary, said he thought banks had “behaved extremely badly” and he would intervene in the scandal."
Unquote.
Cable is, like all other MPs, just a lot of malodorous wind and foetid water!
If the Banks are issued with fines, it is the Banks who pay and NOT the Bankers who ignore any law or procedure which hinders their avarice.
If a car is being driven at excessive speed the police don't arrest the car nor do the magistrates fine the car, they fine the driver for Gods sake.
The ideal is to take the offenders to task, put a halt to the huge bonuses which are no more than profits from money laundering or some other form of corrupt practice. But of course Cable nor any minister will do anything of the sort, their Masonic code encourages the covering up of a fellow member's disingenuous activities not punishing them.
"Vince Cable, the Business Secretary, said he thought banks had “behaved extremely badly” and he would intervene in the scandal."
Unquote.
Cable is, like all other MPs, just a lot of malodorous wind and foetid water!
If the Banks are issued with fines, it is the Banks who pay and NOT the Bankers who ignore any law or procedure which hinders their avarice.
If a car is being driven at excessive speed the police don't arrest the car nor do the magistrates fine the car, they fine the driver for Gods sake.
The ideal is to take the offenders to task, put a halt to the huge bonuses which are no more than profits from money laundering or some other form of corrupt practice. But of course Cable nor any minister will do anything of the sort, their Masonic code encourages the covering up of a fellow member's disingenuous activities not punishing them.
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