Sanity Needed When Punishing Finance Misdeeds
By Roy C. Smith
Indeed, there are fines and regulatory measures to address such failings. But the Libor settlements have gone way past these regulations – alleging that senior management knowingly tolerated fraud within their organisations, even though the managers themselves were not charged.
Now regulators are investigating the same banks’ activities in the foreign exchange market, an even larger market with turnover of $5 trillion per day. On a similar basis for calculating them, settlements could be much greater.
Both Libor and FX markets are unregulated, but banks that trade in them are subject to market conduct rules in the US, the UK and other countries. Several countries are co-operating in the investigations.
Read full article as published in Financial News
Roy Smith is the Kenneth G. Langone Professor of Entrepreneurship and Finance and a Professor of Management Practice.