Courtesy of Pam Martens.
John Griffith-Jones, Chairman, and Martin Wheatley, Chief Executive, of the Financial Conduct Authority, Testify on February 4, 2014 Before Parliament
Yesterday, Martin Wheatley, the Chief Executive of Britain’s top financial regulator, the Financial Conduct Authority (FCA), testified before Parliament’s Treasury Select Committee that the public has valid reasons not to trust the way that rates are set in the foreign currency exchange markets “because of what they’ve seen and the stories that they’ve seen come out.”
Global investigators have accumulated evidence that strongly suggests that traders at the too-big-to-fail banks have been rigging foreign exchange rates in much the same manner that they rigged the interest rate benchmark, Libor.
Unfortunately for the public, Wheatley said it is likely that the investigation will drag into 2015, meaning the public will just have to go on not trusting a marketplace that trades $5.3 trillion a day. (Is this any way to run a global financial system or have we permanently entered the Alice in Wonderland world of finance?)
In answer to the question as to whether the public could trust “the way foreign exchange rates are fixed,” Wheatley responded:
“The methodology is quite interesting. The methodology to most people would seem a much safer methodology than Libor; because it’s actually trades which are real trades – not somebody’s view of the price at which things could happen — in a very, very liquid market. So I think the surprise for all of us as regulators is that actually the allegations have become so strong about fixing of those trades – collusion between traders in that market.
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