The Global Exchange Rate Manipulation Reveals The Tip Of The Iceberg.

< p > US $5 trillion private club global < a href= "//www.sjfzxm.com/news/index_s.asp" > exchange rate < /a > manipulation reveals iceberg corner < /p >

Less than 20 minutes, P rose by 0.57%, the biggest increase in the month, but in the next hour it retreated nearly 2/3.

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< p > this is a fluctuation of the US dollar against the Canadian dollar in the London market on the last trading day of June 2013, which was monitored by Bloomberg.

Just a rise and fall will not cause everyone's attention, but if this happens frequently, then things will no longer be simple.

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< p > in Bloomberg statistics, the frequency of exchange rate fluctuations over 0.2% of the 14 major currencies between July 2011 and June 2013 on the last day of the month between July 2011 and June 2013 has been found. It is found that the fluctuation curve of more than 60 times is not enough to explain by market behavior, and manipulation of exchange rate seems more appropriate.

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< p > as of February 10, 2014, some foreign exchange agencies including the US Department of justice, the Federal Reserve, the European Commission and other three continents across Europe and the United States have launched an investigation into these foreign exchange movements. The top 10 banks in the world have indicated that they are cooperating, and 20 Wall Street exchange members have been forced to leave, suspend or dismiss.

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< p > after the series of benchmark price manipulation such as Libor and metal holdings, the exchange rate market with a daily trading volume of US $5 trillion is also unscathed.

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The crime time < p > strong > 60 seconds is < /strong > < /p >.

< p > 4 p.m. London time has been identified as the key time evidence for this exchange rate manipulation case. It is precisely because the benchmark index of the exchange rate index WM/Reuters widely used in the global foreign exchange market is determined by the price at the closing time of 4 p.m. London time.

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< p > according to WM/Reuters website, the index includes 158 currencies.

The WM/Reuters benchmark index releases the price of these currencies every 1 hours, for every 30 minutes, such as the euro to the US dollar, the US dollar to the Canadian dollar, and so on.

The WM/Reuters benchmark index works at 7 a.m. on Monday morning in Sydney time and 8 at London time on Friday. Therefore, the London foreign exchange market with more than 40% of the daily foreign exchange volume in the world has become an important position to grasp the power of the global market closing price.

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< p > WM/Reuters benchmark index is regarded as the benchmark interest rate by many enterprises and investors. The benchmark interest rate can affect a huge market of social security funds and savings accounts up to 5 trillion US dollars.

And such a huge market is being turned into a private club by traders.

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"P," according to Bloomberg quoted sources, some private electronic chat rooms in some London traders are mysterious. In these chat rooms called "cartel" and "thieves club", traders will collect and share important customer order information and coordinate their trading order.

These seemingly simple answers will give rise to huge fluctuations in the subsequent foreign exchange market.

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< p > before 4 p.m. London time, as a market maker, banks will probably know all the orders on that day. If they want to, they will have the opportunity to bury their orders in advance at the ideal price or to execute the operation ahead of time, so that the market price will move according to their desired direction.

Their time for committing crimes is only 60 seconds.

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The price index of < p > WM/Reuters index is calculated on the basis of the "60 second window period" of every paction before the middle price of all pactions (not commonly used currency is two minutes before the release), so increasing the scale of this minute trading has become the best time for traders to manipulate the closing price.

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< p > a trader over 10 years of experience said that if he received a euro / Swiss Franc directive of 4 euros before 4 p.m., he could do two operations: sell the euro held in his hand at the highest price and lower the euro / Swiss Franc exchange rate so that he could buy it from customers at a lower price after 4 p.m.

In this way, he can get a higher profit from the difference between the benchmark exchange rate and the selling of the euro. If the benchmark interest rate fluctuates to 2 basis points, he will get the value of 200 thousand Swiss francs, and sometimes the benefit of the operation at the end of the month in just 60 seconds will decide the success or failure of these market makers for a month.

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Less than P, driven by interests, more and more banks are willing to take risks.

However, such a perfect time for committing a crime is not a new problem for regulators.

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< p > < strong > < a href= > //www.sjfzxm.com/news/index_cj.asp > Central Bank < /a > dark Xu < /strong > /p >

The "P > WM/Reuters benchmark index was founded in 1994. In 2004, when the index would cover the expansion of the currency from the first 76 to the 158, the" grey value "implied by the index immediately stimulated the interest of the market.

Traders who have been interviewed by Bloomberg for a number of major global banks say that in the past 10 years, this "60 second trading" behavior has occurred almost every day in different currency pactions, and this behavior has not attracted the attention of regulators because of doubts about the influence of traders manipulating the exchange rate.

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P. However, when the global central bank launched the banknote printing machine at the same time, the "60 second trading" began to appear frequently in the past two years in a variety of currency exchange rates. Even so, as the main regulator of the global foreign exchange market, the Bank of England ignored this change.

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The latest news of P February 9th shows that as early as 2012, the Bank of England officials might have known their foreign exchange movements on the foreign exchange market.

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In P April 23, 2012, a conference was held at the Paris bank's London office in Wood Avenue, London.

Participating in this meeting is a member of the chief trader group under the joint foreign exchange Standing Committee of London, which includes officials of the Bank of England, its chief currency trader Martin Mallett and James O 'Commor of the foreign exchange department, including representatives of the main market makers in the foreign exchange market, traders of Citibank Rohan Ramchandani and traders of the UBS group Niall O' Riordan.

All two traders have been dismissed from their banks.

Ramchandani is also a member of the famous chatroom "thieves club".

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< p > according to a participant, there were about 15 minutes of discussion on the manipulation of the foreign exchange market at the conference. Traders told the Bank of England officials about the common practice of sharing and collecting customer orders in the market. The central bank officials acquiesced, but prohibited traders from recording the meeting.

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Less than 18 months after the discussion, the P FCA officially launched an investigation.

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At P, the Bank of England and FCA declined to comment.

However, in the April meeting of the Bank of England, there was no discussion about possible manipulation of the benchmark exchange rate.

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Prior to P, the British central bank's laissez faire in the Libor manipulation has greatly impaired the credibility of the international interbank offered rate. If the currency manipulation is finally finalized, the aura of the British financial center will become more obscure.

From April 2013 to October, the volume of foreign exchange pactions in the world's largest foreign exchange trading center has fallen by 12%, according to a semi annual report issued by the London foreign exchange Standing Committee in late 1.

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< p > < strong > fines > /strong > < /p >

< p > although it is basically the same as Libor and precious metals, the manipulation of exchange rate market is more difficult to define.

Because of the huge liquidity characteristics of the exchange market itself, it is difficult for regulators to tell whether every operation of traders is financial pactions or manipulation.

Arun Srivastava, partner of Baker&McKenzie LLP, a legal consultancy, said that for foreign exchange traders, the foreign exchange market can buy a currency at the current price and complete delivery within two days. Regulators do not consider it illegal. Therefore, it may be difficult for foreign exchange traders to prosecute foreign exchange traders to manipulate the market.

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< p > at present, regulators are trying to find evidence by examining the content of traders' instant messaging tools.

However, due to insufficient evidence, the current submission of instant messenger records also requires the active cooperation of major banks.

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< p > secondly, foreign exchange market pactions are mainly concentrated among several major banks, and it is also difficult for regulators to identify large pactions.

At present, 50% of the foreign exchange market in the world is mainly concentrated in four major banks, of which Deutsche Bank ranks first in 15%, Citigroup, Barclays and UBS followed.

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< p > with the turnover of traders, fines are probably the most powerful punishing instruments that regulators can use and the best results acceptable to financial institutions.

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< p > in the Libor case, the bank involved has fined over $6 billion for its conduct.

European and American regulators issued a record of all fines.

With the further development of the exchange rate manipulation case, perhaps the new ticket price record will soon be refreshed.

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< p > "so far, the manipulation we see may be just the tip of the iceberg."

The US < a href= "//www.sjfzxm.com/news/index_c.asp" > Justice Department < /a > Holder said.

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