Комиссия по торговле товарными фьючерсами (CFTC) выдвинула обвинения против Goldman Sachs в том, что банк пытался манипулировать и создавал ложные отчеты по бенчмарку ISDAFIX в период с января 2007 года по март 2012 года.
Goldman Sachs Group Inc (GS.N) will pay a $120 million penalty to resolve civil charges that it attempted to manipulate a global benchmark for interest rate products known on Wall Street as "ISDAFIX," U.S. derivatives regulators said Wednesday. The case against Goldman Sachs, brought by the Commodity Futures Trading Commission, was the latest in a series of broad investigations into manipulation by big banks of a variety of global benchmark rates. To date, the CFTC has imposed penalties of over $5.2 billion stemming from these probes, which include Libor and Euribor, foreign exchange benchmarks, and the U.S. Dollar International Swaps and Derivatives Association Fix, or USD ISDAFIX.
29 сентября 2016 года в Москве (отель "ИнтерКонтиненталь" (5*), Тверская, 22) пройдет ключевое событие года для российского рынка производных (ПФИ) - традиционная XI Международная Конференция "Российский рынок деривативов: способны ли ПФИ застраховать российскую экономику", организуемая СРО Национальная финансовая ассоциация. Конференция проводится при поддержке Банка России, а также при участии Международной ассоциации свопов и деривативов (ISDA), Европейского Банка Реконструкции и Развития (EBRD) и The Financial Markets Association (ACI FMA). К выступлению с установочным докладом о Стратегии рынка ПФИ на Конференции приглашен Первый заместитель Председателя ЦБ РФ С.А. Швецов. Программа текущей Конференции 2016 года традиционно важна, т.к. большая часть выступлений и дискуссий пройдет по актуальным проблемам функционирования и развит
29 сентября в Москве (отель «InterContinental Moscow» (5*)) состоится XI МЕЖДУНАРОДНАЯ КОНФЕРЕНЦИЯ РОССИЙСКИЙ РЫНОК ДЕРИВАТИВОВ: "Способны ли ПФИ застраховать российскую экономику"
Организатором выступает СРО Национальная финансовая ассоциация, при поддержке: Центрального Банка Российской Федерации, Международной ассоциации свопов и деривативов (ISDA), Европейского Банка Реконструкции и Развития (EBRD) и The Financial Markets Association (ACI FMA)
Another day, another too-big-to-fail bank gets slapped on the wrist after being busted for blatant rigging of the market. The CFTC Order finds that, beginning in January 2007 and continuing through January 2012 (the Relevant Period), Citibank on multiple occasions attempted to manipulate, and made false reports concerning, the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX), a global benchmark for interest rate products. Notably, while a handful of European banks have already settled criminal or civil claims tied to Libor rigging, Citi is the first U.S. bank to do so. The CFTC Order requires Citibank to pay a $250 million civil monetary penalty and to immediately cease and desist from further violations of the Commodity Exchange Act. Further, Citibank is required take specified steps to implement and strengthen its internal controls and procedures, including measures to detect and deter trading potentially intended to manipulate swap rates such as USD ISDAFIX and to ensure the integrity of interest-rate swap benchmarks. “The CFTC’s order demonstrates that we will vigorously continue to investigate any efforts to manipulate financial benchmarks, and we will take action where possible to protect the integrity of these benchmarks,” said Aitan Goelman, the CFTC’s Director of Enforcement. Mr. Goelman further commented, “The terms of this settlement are intended to reflect all aspects of Citibank’s response to the investigation, including the evolving nature of its cooperation.” Citibank’s Unlawful Conduct to Benefit Derivatives Positions As the Order sets forth, Citibank attempted to manipulate USD ISDAFIX by making false USD ISDAFIX submissions. According to the Order, on multiple occasions during the Relevant Period, Citibank, in its role as a panel bank, submitted a rate or spread higher or lower than the reference rates and spreads disseminated to the panel banks on certain days that Citibank had a derivatives position settling or resetting against the USD ISDAFIX benchmark, in an attempt to benefit that derivatives position. The Order also finds that Citibank, on multiple occasions, attempted to manipulate USD ISDAFIX by bidding, offering, and executing transactions in targeted interest rate products, including swap spreads and U.S. Treasuries at or near the critical 11:00 a.m. fixing with the intent to affect the reference rates and spreads captured in the snapshot sent to submitting banks, and thereby to affect the published USD ISDAFIX. As captured in electronic communications, Citibank traders boasted about “pushing out the isdafixing” or “push[ing]” the market, described USD ISDAFIX as being “suprising[ly] easy to push,” and explained the best way to “influence the set.” The Order describes multiple examples involving these strategies for attempted manipulation and false reporting by Citibank during the Relevant Period. Additionally, Citi faces fine for manipulating Yen Libor... *CFTC ORDERS CITIBANK & JAPANESE AFFILIATES TO PAY $175M PENALTY Citi issued the following statement: “These settlements represent a significant step for Citi in resolving its legacy benchmark rate investigations. In addition to adopting industry-wide reforms related to participation in benchmark rates, Citi has made substantial investments in its systems, controls and monitoring processes to better guard against inappropriate behavior. Our greatest priority is to ensure that we conduct business in keeping with the highest ethical standards. We continue to fully cooperate with pending investigations conducted by other agencies related to benchmark rate submissions.” As they proudly note in the press release, with today's actions, CFTC has imposed over $5.08 billion in penalties in 17 actions against banks and brokers to address rigging and manipulation in ISDAFIX, FX, and LIBOR benchmarks. "Cost of doing business" is what we call that... you decide - basedon the spike in Citi's stock - whether the market thinks this is a let-off or a real punishment...
Why a proposal to "stay" derivatives termination in the event of bank bankruptcy is inconsequential and avoids bigger questions about the use of derivatives and failure to rein in risks in this market.
Agencies announce rules to reflect ISDA protocol in regulatory capital and liquidity coverage ratio rules
Agencies announce rules to reflect ISDA protocol in regulatory capital and liquidity coverage ratio rules
Ответ на запрос ISDA и НАУФОР «О представлении информации в репозитарий»
Currency Markets Are Rigged Currency markets are massively rigged. And see this and this. Reuters notes today: Regulators fined six major banks including Citigroup (C.N) and UBS (UBSN.VX) a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation. HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), JP Morgan (JPM.N) and Bank of America (BAC.N) also face penalties resulting from the inquiry that has put the largely unregulated $5 trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England. In the latest scandal to hit the financial services industry, dealers shared confidential information about client orders and coordinated trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings. Dozens of traders have been fired or suspended. *** Britain’s Financial Conduct Authority (FCA) fined five lenders $1.77 billion, the biggest penalty in the history of the City of London, and the U.S. Commodity Futures Trading Commission (CFTC) ordered them to pay a further $1.48 billion. *** The U.S. Office of the Comptroller of the Currency, which regulates banks, also fined the U.S. lenders $950 million and was the only authority to penalise Bank of America. Gold and Silver Are Manipulated Today, Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver. Reuters reports: Swiss regulator FINMA said on Wednesday that it found a “clear attempt” to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS … Gold and silver prices have been “fixed” in daily conference calls by the powers-that-be. Bloomberg reported last December: It is the participating banks themselves that administer the gold and silver benchmarks. So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012. For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets. Derivatives Are Manipulated Runaway derivatives – especially credit default swaps (CDS) – were one of the main causes of the 2008 financial crisis. Congress never fixed the problem, and actually made it worse. The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market. Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed (see below) … through gamed self-reporting. Reuters noted in September: A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps. *** “The complaint provides a chronology of behavior that would probably not result from chance, coincidence, independent responses to common stimuli, or mere interdependence,” [Judge] Cote said. The defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc , JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG. Other defendants are the International Swaps and Derivatives Association and Markit Ltd, which provides credit derivative pricing services. *** U.S. and European regulators have probed potential anticompetitive activity in CDS. In July 2013, the European Commission accused many of the defendants of colluding to block new CDS exchanges from entering the market. *** “The financial crisis hardly explains the alleged secret meetings and coordinated actions,” the judge wrote. “Nor does it explain why ISDA and Markit simultaneously reversed course.” In other words, the big banks are continuing to fix prices for CDS in secret meetings … and have torpedoed the more open and transparent CDS exchanges that Congress mandated. Interest Rates Are Manipulated Bloomberg reported in January: Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate. RBS Securities Japan Ltd. in April pleaded guilty to wire frauda s part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haventoday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department Justice Department. Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep. RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties. Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions. To put the Libor interest rate scandal in perspective: The big banks have conspired for years to rig interest rates … upon which $800 trillion in assets are pegged This was the largest insider trading scandal ever … and the largest financial scam in world history Local governments got ripped off bigtime by the Libor manipulation Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks Energy Prices Manipulated The U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011. Pulitzer prize-winning reporter David Cay Johnston noted in May that Wall Street is trying to launch Enron 2.0. Oil Prices Are Manipulated Oil prices are manipulated as well. Commodities Are Manipulated The big banks and government agencies have been conspiring to manipulate commodities prices for decades. The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity. And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. More from Matt Taibbi, FDL and Elizabeth Warren. Everything Can Be Manipulated through High-Frequency Trading Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this. Manipulating Numerous Markets In Myriad Ways The big banks and other giants manipulate numerous markets in myriad ways, for example: Engaging in mafia-style big-rigging fraud against local governments. See this, this and this Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this) Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car Cheating homeowners by gaming laws meant to protect people from unfair foreclosure Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this Otherwise manipulating markets. And see this Participating in various Ponzi schemes Charging veterans unlawful mortgage fees Cooking their books (and see this) Bribing and bullying ratings agencies to inflate ratings on their risky investments The Big Picture The experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud. Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”. As Nobel prize winning economist Joseph Stiglitz noted years ago: “The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with. The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.” Indeed, Reuters points out today: Switzerland’s regulator FINMA ordered UBS, the country’s biggest bank, to pay 134 million francs ($139 million) after it found serious misconduct in both foreign exchange and precious metals trading. It also capped bonuses for dealers in both units at twice their basic salary for two years. Capping bonuses at twice base salary? That’s not a punishment … it’s an incentive. Experts say that we have to prosecute fraud or else the economy won’t ever really stabilize. But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing. And there is no change in the air.) Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements. In fact: “The banks have been allowed to investigate themselves,” one source familiar with the investigation told Reuters. “The investigated decide what they want to investigate, what they admit to, and how much they will pay. Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books. And they will keep on doing so until the Department of Justice grows a pair. The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail. It’s that simple …
The bank gambling trade association and its regulators are giving each other high-fives over an agreement that supposedly makes it easier to bail out a failed mega-bank. Progress? If viewed from the vantage of an average taxpayer who finances bank bailouts, the progress is miniscule. And the circumstances that put this agreement barely into the "progress" column beg for far more ambitious reform. Specifically, 18 of the largest global banks just agreed to wait about a day when one of them fails before pocketing the winnings from bets made with each other. Exactly how long the waiting period will be isn't clear. These bets are called swaps. The agreement about how bets are settled is governed by a master contract of the International Swaps and Derivatives Association (ISDA), which is the industry trade association. Originally conceived as hedges, the way farmers lock in a price for commodities such as corn that hasn't yet been grown, harvested and sold, swaps have now been perverted into a $700 trillion racket largely patronized by banks. This high stakes game primarily plays out in what's called the over-the-counter (OTC) market. Ninety percent of the OTC bets are between banks themselves. In fact, four banks account for most of the bets in the US banking industry. Real economy companies such as airlines or car manufacturers account for only about 10 percent of the OTC casino. Even mega-bank Wells Fargo, currently the most valuable bank on the US stock market, doesn't gamble nearly at the scale of its peers JP Morgan, Citigroup and Bank of America. In other words, if swaps are so useful to the economy, why doesn't Main Street account for most of them? And how can Wells Fargo be so successful a bank without a swaps portfolio that matches Citi's? One enabler of this OTC swaps gambling has been the bankruptcy code. Normally, lenders must be wary of the entities to which they loan money because if a company declares bankruptcy, it may not repay the entire loan. Bankruptcy law outlines procedures for slicing up and doling out what's left of value in a firm. The first step is what's called a "stay" on payments. The average liquidation in bankruptcy lasts more than 700 days before all claims are settled. But swaps gamblers don't have to wait for the liquidation process to play out so they are therefore guaranteed to recover their winnings. So one bank needn't worry if the bank it's gambling with is badly run. As one scholar soberly noted: "By privileging this class of creditors, these [bankruptcy] provisions reduce incentives to monitor counterparty risk, and thus magnified losses experienced during the recent financial crisis." Why swaps gambling enjoys this privilege is a testament to bank lobbying, according to Duke scholar Prof. Steven Schwarcz, who has traced the devolution of bankruptcy discipline for the swaps market. Casino gambling on swaps probably shouldn't exist, let along receive privileges in bankruptcy The Lehman Brothers firm had some 900,000 swap bets open at the time of its bankruptcy. One reason for the mess caused by the Lehman bankruptcy is that winners collected their cash immediately, and losers waited until the bankruptcy court forced payment. The cash that evaporated through terminated swaps bets left less for Lehman's other creditors. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) law already provides that the US government can declare a short stay if it decides to step in and prevent a financial firm's bankruptcy, which might include a bailout. Among the problems of the current US law is that it only covers US-regulated banks. Where a US bank makes a swaps gamble with a foreign firm, that foreign firm can still immediately collect its winnings. The new ISDA stay agreement between the 18 largest banks is touted as progress because it would apply to cross-border swaps. ISDA's announcement was welcomed by US regulators and the Federal Reserve Board called it "an important step." However, others believe the short stay agreement will backfire. Trader Michael O'Brien of Eaton Vance said it would lead to "runs on banks" because "if I know a counterparty looks likely to default, I will want to close out my positions immediately before I am stayed." Some believe the problem will just shift. Analyst Karen Petrou believes swap traders will move away from the banks covered by these rules to firms that aren't regulated banks that belong to ISDA. That could be a good thing since reducing swaps gambling at banks, especially mega-banks, might be a slight improvement for taxpayers if such gambling is contained to firms that won't require a bailout because they're not considered systemically important to our economy. In the end, ending the swaps privileges in bankruptcy altogether would be real improvement. Congress could reform bankruptcy law or regulators could force banks to change their swap agreements. Existing provisions in Dodd-Frank empower the regulators to do just that. Dodd-Frank requires banks to prepare plans dubbed "living wills" that make bankruptcy possible. The government must find these wills "credible." None of the mega-banks have passed this test yet. When they do, that will be time for a high five.
Индустрия производственных финансовых инструментов объемом $700 трлн пошла на фундаментальную реформу с января текущего года, направленную на закрытие разорившихся банков без дестабилизации рынков. Международная ассоциация свопов и деривативов (ISDA) и 18 крупных банков, доминирующих на рынке в настоящее время, позволят финансовым регулятором накладывать временный запрет, чтобы предотвратить ажиотаж на контракты по деривативам, если у банка появились проблемы. Приостановка даст время регуляторам убедиться, что важные подразделения банков, а в частности, те, кто ответственен за клиентские счета, идут на смягчение, в то время как другие ликвидированы или проданы по всем правилам. Это поможет предотвратить рыночный коллапс, который был спровоцирован крахом Lehman Brothers в 2008 г. и положить конец проблемам банков, которые считаются слишком большими, чтобы лопнуть. Совет по финансовой стабильности (FSB), регулирующий орган в рамках G20, попросил ISDA внести изменения с целью предотвращения проблем too-big-to-fail, когда банкам помогали с помощью денег налогоплательщиков избежать нарушения рынка. По новым условиям, поправки в деривативные контракты, такие как процентные ставки или кредитные дефолтные свопы, будут приостановлены на срок не более 48 часов.