The US Government today announced that five of the largest banks in the world will have to pay together a fine of more than 5,700 million dollars by manipulating five years changes in currency internationally.
“Historical” and “unprecedented” were the words used by the authorities of the Department of Justice to describe the fines to US companies Citigroup, JP Morgan Chase; Barclays and Royal Bank of Scotland (RBS) British, and Swiss bank UBS.
The greatest punishment lies with Barclays, which paid a total of about 2,400 million dollars, including 710 million to the Department of Justice, 485 million the Department of Financial Services of New York, 400 million to Futures Trading Commission (CFTC), 342 million to the Federal Reserve (Fed, the US central bank) and 441 million to the British regulator.
For quantities stands after Citigroup, which must cope with a total of 1,267 million dollars in fines and penalties 342 925 Federal Reserve and the Department of Justice handling the foreign exchange market.
The following sanctioned bank is another major US, JPMorgan, which will disburse payments 892 000 000, of which 342 must pay the US central bank and 550, the Department of Justice.
Meanwhile, The Royal Bank of Scotland will pay to the Fed $ 274 million and the Department of Justice, 395 million, so that, in total, assumes a fine of 669 million dollars.
The entity will have to pay less UBS, the first to cooperate with the authorities, who will respond to sanctions with a value of 545 million Swiss, of which 203 paid to the Department of Justice and 342, the Fed.
The Swiss company has been convicted of having committed wrongdoing in relation to the interest rate on loans between banks in Europe, known as Libor, according to a Justice Department statement.
Of the 5.775 million dollars penalties totaling over 3,000 million are part of a criminal penalty that the US government agreed with the five entities, which also must be subject to monitoring for three years.
In parallel with the fine of US executive, the Federal Reserve has decided to impose 1.800 billion in sanctions on these five banks and another, Bank of America, which has been spared accusations Department Justice.
Bank of America will pay to the Federal Reserve’s $ 205 million for “affect prices of currency transactions in the United States and the international financial market,” the written which the central bank imposes sanctions.
According to the American Justice, between December 2007 and January 2013, operators in charge of exchange between the euro and the dollar Citigroup, JPMorgan, Barclays and RBS formed a group calling itself “The Cartel”, to manipulate the foreign exchange (Forex) where every day more than 5 trillion dollars move, according to the British regulator.
“Almost every day for five years used a private chat room to manipulate the exchange rate using a coded language to hide, “he said at a press conference the Attorney General Loretta Lynch.
The US Justice states that the group of banks He manipulated the two main indicators for pricing currencies: fix the European Central Bank, which measures the euro against other currencies at 13.15 UK; and the World Markets / Reuters fix, for measuring the rate between dollars and pounds at 16.00 British.
With these indicators, third parties develop a fixed daily exchange rate with which the citizens made the currency changes.
In addition, the statement of the US Government, members of “The Cartel” operated on the exchange rate between the euro and the dollar through agreements to suspend the bids or offers these currencies, which prevented the exchange rate moving in a direction that does not benefit them, they protected each other and damaging to competition.
The performance of banks, “as partners rather than as competitors “to make them favored the exchange rate detracted from” countless “investors and institutions around the world, including other banks and customers who trusted that the market would generate a competitive exchange rate, as noted Lynch.
As a result of this investigation, which lasted 19 months twelve individuals have been charged with manipulating the Libor and three have pleaded guilty, according to US authorities, who avoided giving details on the individuals involved because the investigation yet remains open. EFE
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