Out-of-court settlements, such as the one involving Standard Chartered announced recently, do little to alter bankers’ behaviour or to put the global financial system on sounder footing – and may even promote financial crime.
In the wake of the recent spate in scandals involving British banks, the U.K.’s Serious Fraud Office (SFO) is now predictably making all the right noises about prosecuting miscreant bankers. Yet legal experts on both sides of the Atlantic argue that the SFO is too weak to live up to its promises; and say that the more aggressive U.S. system could be a far likelier source of prosecutions.
Unlike other recently ousted bank CEOs, Barclay’s Bob Diamond was a banker supposedly at the top of his game. Nevertheless, Diamond met his (figurative) demise after he forgot that the continued existence of any bank with a large balance sheet depends largely on maintaining a good relationship with regulators. The Libor scandal though is only the beginning: Although banks still remain powerful on the surface, their legitimacy continues to crumble.
Federal regulators in the U.S. have revealed the “living wills” of nine of the world’s largest banks, reported Reuters on Tuesday, with the “wills” detailing exactly how the government should dismantle the banks in the event of a potential collapse.
Singapore’s Oversea-Chinese Banking Group (OCBC) has once again been named as the world’s strongest bank by Bloomberg Markets magazine, with two other Singaporean banks included in the top ten, while six Canadian banks made the list.
Bloomberg compiled the information through compiling a list of 78 banks that had total assets of more than $100 billion as of mid-March this year.
Credit unions have long been touted as an alternative to banks, though only recently have more and more customers made the switch over to the financial cooperative.
Unlike banks, credit unions are not-for-profit financial institutions that are owned by the same people who belong to the union. Since every member of a credit union is an equal owner, customer satisfaction tends to be higher as well. According to Bankrate.com, “Credit unions have topped the consumer satisfaction ratings in American Banker’s annual survey for 12 years in a row.”
From humble beginnings in the 1990’s, Islamic finance has become a trillion-dollar industry. And, despite scepticism regarding accommodation between Islamic and global finance, leading banks are buying Islamic bonds and forming subsidiaries specifically to conduct Islamic finance.
High-frequency trading has been in existence since 1999; thought it only caught the public’s attention after the “Flash Crash” in 2010 – when high-frequency liquidity providers were found to have withdrawn from the market, resulting in increased volatility and inflated asset price bubbles. But does speed-trading, as it is sometimes called, deserve its bad reputation or does it really create a “mirage of liquidity”?
There can be little doubt that high-frequency trading (HFT) is a malign force in the financial markets.
In recent years, Michel Barnier, the EU commissioner for the internal market and services, has tried to oversee regulatory reform for the financial sector towards serving the society. But, the biggest obstacle to his progress, according to Barnier himself, is financial lobbying that has a clear vested interest in the status quo and neutralising reforms.
The European Commission, the European Union’s executive body, has launched a public consultation and investigation into shadow banking practices in the region, as they aim to implement new controls and supervisory measures for the system in the future.
Speaking at a meeting in Brussels on Monday, the EU Commissioner for Internal Market and Services Michel Barnier acknowledged that shadow banking was posing a serious potential threat to long-term financial stability, despite providing close to 46 trillion euros ($60.87 trillion) to the economy.
