Sat, 08 May 2021 Today's Paper

Criminal frauds in biggest foreign banks - EDITORIAL

27 May 2015 05:26 am - 0     - {{hitsCtrl.values.hits}}

A A A



Amid an ongoing controversy in Sri Lanka over insider trading in Treasury bonds, five global banks last week agreed to pay more than $5 billion in combined penalties and plead guilty to criminal charges. This was to resolve a long-running United States investigation into whether traders colluded to move foreign-currency rates for their own financial benefit, the Wall Street Journal reported.

The settlements largely close the book on the latest industry wide investigation, one of a steady stream of probes into mortgage misdeeds, manipulative trading behaviour and tax evasion. The biggest global banks have paid more than $ 60 billion in penalties over the past two years to resolve allegations of wrongdoing, the widely respected financial journal said.

Four of the banks, Barclays PLC, Citigroup Inc., J.P. Morgan Chase & Co. and Royal Bank of Scotland Group PLC, pleaded guilty last Wednesday to conspiring to manipulate prices in the $500 billion-a-day market for U.S. dollars and euros, authorities said. The fifth bank, UBS AG, received immunity in the antitrust case but pleaded guilty to manipulating the London interbank offered rate, or Libor. It will pay a fine for violating an earlier accord meant to resolve those allegations of misconduct, bringing the total the five banks agreed to pay to $5.6 billion.

The possibility of five large banks pleading guilty to criminal charges in a single day—including the largest and third-largest U.S. banks by assets, J.P. Morgan and Citigroup—would have been unthinkable only a few years ago, when executives warned the fallout from such a move would be disastrous to their ability to conduct business, journal said.The size and scope of the resolutions reflect authorities’ attempts to crack down on what they called “breathtaking” misconduct, with some of the largest fines levied to date by the Justice Department for antitrust violations.  Prosecutors also took the unusual step of ripping up a prior agreement with UBS as a result of subsequent violations and extracted the first criminal guilty pleas from big U.S. banks in decades, the report said.
In the aftermath of these scandalous revelations Sri Lanka also needs to act with care and caution. We are no longer considered a poor country and therefore we will not get grants from international agencies. With the prestige of becoming a middle income country we have also being thrown into the World Market where we see a regular occurrence of multi-million dollar  criminal frauds such as those exposed last week.

The main issue of the Yahapalanaya government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe is the heated controversy over the appointment of Arjuna Mahendran as the Governor of the Central Bank. This appointment was made in February by Premier Wickremesinghe despite objection mainly because Mr. Mahendran, though recognised as a brilliant banker, he is a citizen of Singapore. Even the Government spokesman and Minister Rajitha Senaratne, known to be close to President Sirisena, said he had objected to the appointment of Mr. Mahendran.

The controversy exploded with the issue of a Treasury bond on February 28. Questions are still being asked over how the bond was suddenly raised to ten times its original value and how a company owned by Mr. Mahendran’s son-in-law got a major portion of the financial pie. The Prime Minister appointed a committee of three party lawyers to probe the bond issue and the allegations of insider trading.

But the committee’s report is being interpreted by different parties in different ways and now the issue has been placed before a Parliamentary Select Committee (PSC) which has been asked by the Speaker to submit a report by next week.  The three member Committee had also disclosed that an illegal transaction of Rs 2,700 billion (Rs. 2.7 trillion) had taken place at the Central Bank in 2012, 2013 and 2014, without following the proper tender procedure.
Last week also there was a roaring debate in Parliament with the veteran socialist leader Vasudeva Nanayakkara resorting to the level of using a four letter word against the Prime Minister.All in all the developments both here and abroad spotlight the need for the government to regulate and monitor the work not only of the Central Bank but of state and private commercial banks.   
See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Lester James Peries the Emancipator of Sinhala Cinema

Renowned Sri Lankan Film Maker Lester James Peries passed away three years ag

Emergency berthing of M.V BBC Naples at Hambantota Port: SL Atomic Energy Act violated

Even though Sri Lankan waters appear to be calm, geopolitically speaking, the

“We are just giving it away for Yuan” SLPP Parliamentarian Wijeyadasa Rajapakshe

The basic idea is to safeguard the nation. We are doing politics not for our

Port City Economic Commission Bill; Separate state in the horizon?

Political parties including the Opposition have raised concerns over transpar

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.