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The ‘Smelly Poo Index’ on banking fraud

United States
Bank of England

The Bank of England Mark Ramsay under a Creative Commons Licence

There are four distinct ‘Smelly Poos’ developing from the scandal of foreign exchange fraudulent manipulation by the banking sector. Thus far, US, British and Swiss regulators have fined JP Morgan, Citibank, RBS, HSBC and UBS a total of $4.3 billion, and more fines are expected on Barclays Bank amongst others.

As a Lloyds Bank whistleblower and campaigner, I have devised a Smelly Poo Index system to reflect the growing anger at the refusal of British and US governments to prosecute senior bankers for criminal fraud for PPI mis-selling, interest-rate swap mis-selling, Libor manipulation and foreign exchange manipulation.

Or in plain English – theft.

Smelly Poo Index Ratings (from least bad to worst)

Fourth Place, with a 87-per-cent reek-stench rating, awarded to The British Conservative-led government

The government has refused to prosecute senior bankers for criminal fraud. There is an unhealthy relationship between the financial sector in the City of London and the donations the Conservative Party receives from them.      

Conservative Party backers/donors are dominated by City of London donors, including over £1 million ($1.5 million) handed over by hedge funds since July and, hey presto, there are no government-led actions to prosecute senior bankers at RBS, Barclays, Lloyds or HSBC for foreign exchange, Libor, interest-rate swap mis-selling, or PPI mis-selling.

Third Place, with a 89-per-cent reek-stench rating, awarded to The Bank of England (BoE)

BoE knew of foreign exchange (Forex) manipulation risks in 2006. Martin Mallett, the bank’s chief foreign exchange dealer, was suspended in March 2014 and dismissed in November for ‘serious misconduct’, only hours before the Forex fines were announced against the banks.

He is reported to have failed to escalate his concerns about the risks of foreign exchange manipulation, though BoE denies that any bank official was involved in ‘any unlawful or improper behaviour’.

So, if no Bank of England official was involved in any improper conduct, why the contradictory behaviour in dismissing Martin Mallett? Very odd.     

Second Place, with a 91-per-cent reek-stench rating, awarded to Britain’s Financial Conduct Authority (FCA), the City’s regulatory body

The FCA investigations into banks’ manipulating of foreign exchanges tasked the culprit banks to conduct their own in-house investigations. The Financial Times reports that the FCA relied on the information given to them by the offending banks and their lawyers: ‘The FCA has not interviewed some of the main individuals concerned.’

There is a very smelly odour surrounding the concept of the thieves being asked to investigate their own theft with the help of the legal profession and indeed the UK regulators.

First Place, at a 99-per-cent reek-stench rating, awarded to past and current board-level directors of HSBC, Lloyds, Barclays, RBS, JP Morgan, Citigroup, Bank of America, UBS etc. 

According to Mark Carney, the governor of the Bank of England, top banking executives ‘got away without sanction’.

‘Maybe they were not at the best tables in society after that, but they’re still at the best golf courses. That has to change,’ he said.

In Britain and the US, not one board-level director in the banking sector has been charged with fraud since the banking crisis in 2008.

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