There are people living today who remember the Great Depression. They remember thousands upon thousands of small depositors who lost life savings when bank after bank went under. A few years after the crash, the federal government instituted the FDIC, government backed protection for small depositors, which is still in effect today. Banks and bankers for many decades in the Twentieth Century were considered stalwarts of society. “Banks are safe”.
In 2008, a Great Recession occurred. The federal government had to bail out banks! One of the reasons for that catastrophe was that banks were bundling and selling mortgages to each other. No one cared to notice that many mortgages in those bundles had little chance of being paid – so much for trustworthy banks and bankers. Like all institutions designed to make money, banks and bankers have their shady characteristics. The latest (maybe not the latest) misconduct by the industry uses the speed of the inter-net to carry out nefarious transactions.
The Financial Conduct Authority (FCA) recently reached a settlement of 1.1billion pounds with five banks. The banks were accused of failures to establish adequate systems of controls thereby allowing traders to manipulate the fixed rate across the world’s largest currencies.
It seems that several banks (bankers) in collusion arranged a series of trades over a period of 33 seconds before the daily setting of the fixed rate of exchange for the euro against the US dollar. That exchange netted Citigroup $99,000.00. This is just one example of this kind of activity.
For decades banks in certain countries can hold and/or launder money made illegally. They can transfer cash to terrorist organizations. They can pay for weapons used against civilian populations. Can the FCA extend its scope to take on these banks? They do not seem to have an adequate system of controls.