21 November 2014

“Corrupt” was a term used by the UK Chancellor last week when describing foreign exchange rigging  practices of numerous leading banks.  Regulators imposed a total of £2.6 billion in penalties on six institutions when settling five years of a “free for all culture” of rigging foreign exchange markets.

As part of settlements with the UK Financial Conduct Authority, record fines were imposed  – UBS was fined £233m,  Citibank £225m, JPMorgan  £222m, RBS  £217m, and HSBC  £216m.  Barclays has yet to settle.  In the US,  Citibank and JP Morgan were each fined $310m, RBS and UBS were fined $290m each, and HSBC $275m.

But this week the corruption appears to have come closer to home. ANZ Banking Group is being investigated by the Australian Securities and Investments Commission for manipulating Australian interest rates since 2007.  Seven traders have been suspended. Australian rates appear to have been manipulated in much the same way as the London Inter-Bank Offer.

The SMH suggested yesterday that corrupt practices are entrenched. It reported a former trader saying that fixing was ingrained in the way trading desks have operated for more than a decade. …. It’s a culture that has been endemic in the industry.”

This seems to reflect the deteriorating ethical assessment of ANZ by Ethisphere, which each of the last nine years has published an index of the World’s 100 most ethical companies.   ANZ was one of five banks in the index in 2011 together with National Australia Bank, Westpac, Robobank and Standard Chartered.  But whereas NAB and Westpac have remained on the index in successive years, ANZ has lost its ethical rating (this year, Teachers Mutual ( another Australian bank ), rates among the 100 most ethical..

(All Good Organics which was among the 100 most ethical companies for 2014 is the only New Zealand registered company to be recognised by Ethisphere..)

God Defend New Zealand was recognised as the national anthem this day in 1977.

www.theguardian.com/business/2014/nov/12/foreign-exchange-fines-ubs-hsbc-citibank-jp-morgan-rbs-penalties-market-rigging

http://ethisphere.com/worlds-most-ethical/wme-honorees/

www.smh.com.au/business/banking-and-finance/anz-traders-stood-down-over-interest-rate-rigging-probe-20141119-11pxmn.html#ixzz3JbTdRux8

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