U.S. banks moved billions of dollars in trades beyond Washington’s reach

[Ichingcarpenter]

Part 2: The story of how Wall Street’s giants got around derivatives rules imposed by the CFTC after the financial crisis. The fix: tweaking contracts and shifting deals offshore.

NEW YORK – This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.

“We saw strange things in the data,” said Chris Barnes, a former swaps trader now with ClarusFT, a London-based data firm.

The vanishing of the trades was little noted outside a circle of specialists. But the implications were big. The missing transactions reflected an effort by some of the largest U.S. banks — including Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, and Morgan Stanley — to get around new regulations on derivatives enacted in the wake of the financial crisis, say current and former financial regulators.

The trades hadn’t really disappeared. Instead, the major banks had tweaked a few key words in swaps contracts and shifted some other trades to affiliates in London, where regulations are far more lenient. Those affiliates remain largely outside the jurisdiction of U.S. regulators, thanks to a loophole in swaps rules that banks successfully won from the Commodity Futures Trading Commission in 2013.


more


http://www.reuters.com/investigates/special-report/usa-swaps/

[bemildred]

1. If you allow them to game the system, they will, and they will be proud of it too. nt

[Ichingcarpenter]

3. Too big to jail .. Too big to fail...too big to breakup bullshit..

enables them to be the blood suckers they are.





The big banks, far from being “at the heart of the global economy,” actually function more like tapeworms feeding on that economy. And the case in question, the manipulation of currency markets, is a good example of this. By manipulating currency markets, these banks have been doing nothing to facilitate trade and commerce. On the contrary, they have been profiteering by rigging the markets and raising the costs of doing business for all companies and for all people who need to change one currency for another. Every raw material that a company in the US buys from abroad, every product that a foreign buyer purchases from a US producer, every consumer good that a US citizen buys from a foreign supplier, costs more because of the rigged currency trading that the banks have secretly been engaging in.

How much did this massive conspiracy cost, and how much did these corrupt banks make by manipulating currencies? Here’s what Matt Levine wrote about that in Bloomberg News:

“How much money did those banks make manipulating that $5.3 trillion foreign exchange market? I don't know! No one seems to care. The U.K. Financial Conduct Authority says ‘that it is not practicable to quantify the financial benefit’ that each bank got from its manipulations; the U.S. Commodity Futures Trading Commission and Office of the Comptroller of the Currency don't even acknowledge that the question might be interesting.”

So that’s how the US is handling criminality by some of the largest and most predatory corporations in the US and the world today....


http://www.commondreams.org/views/2015/05/17/if-too-big-fail-means-too-big-jail-it-should-mean-too-big-be

[hobbit709]

2. Is anyone really surprised by this?

[think]

4. Thanks for posting. Goldman Sachs is now opening new banks in Hong Kong & other

places to avoid the new rules.

Goldman Looks Overseas Amid Derivative Trading Rules

BY CIARAN MCEVOY, INVESTOR'S BUSINESS DAILY
08/19/2015 02:14 PM ET

Goldman Sachs (NYSE:GS) units have gained a banking license in Hong Kong and additional access to funding in the United Kingdom, as the New York-based investment bank looks for ways to book trades through local subsidiaries.

Investment banks have been establishing new subsidiaries in overseas markets as post-crisis regulations have forced them to change where their over-the-counter derivatives transactions are recorded.

On Wednesday, the Hong Kong Monetary Authority said a wholly-owned unit of Goldman Sachs was given a banking license, allowing it to take deposits of roughly $64,000 and above.

The Hong Kong move came a day after the Bank of England approved a request from Goldman's United Kingdom subsidiary for more access to funding from the central bank's Sterling Monetary Framework in the event of a financial crisis.

Read More At Investor's Business Daily: http://news.investors.com/business/081915-767255-goldman-sachs-expands-reach-into-hong-kong.htm#ixzz3jXnX8yLV

[mopinko]

5. this is why bernie's robin hood tax will never work.

it will just kill good jobs here. the money will flow to where there are no taxes.
unless he can get it done on a worldwide scale, it will fail.

[think]

6. The too big to fail banks get around new regulations on derivatives by offshoring them.

what's not to love?...

[Octafish]

7. Simple Solution: TAX Offshore Wealth.

We have the technology. We know who and we know where They have hidden the cash.



[font size="1"]"Conspiratorial Wink" (detail) by Michael Samuels[/font size]

On My Mind

Tax Offshore Wealth Sitting In First World Banks

James S. Henry
07.01.10, 09:00 AM EDT
Forbes Magazine dated July 19, 2010

Let's tax offshore private wealth.

How can we get the world's wealthiest scoundrels--arms dealers, dictators, drug barons, tax evaders--to help us pay for the soaring costs of deficits, disaster relief, climate change and development? Simple: Levy a modest withholding tax on untaxed private offshore loot.

Many aboveground economies around the world are struggling, but the economic underground is booming. By my estimate, there is $15 trillion to $20 trillion in private wealth sitting offshore in bank accounts, brokerage accounts and hedge fund portfolios, completely untaxed.

SNIP...

This wealth is concentrated. Nearly half of it is owned by 91,000 people--0.001% of the world's population. Ninety-five percent is owned by the planet's wealthiest 10 million people.

SNIP...

Is it feasible? Yes. The majority of offshore wealth is managed by 50 banks. As of September 2009 these banks accounted for $10.8 trillion of offshore assets--72% of the industry's total. The busiest 10 of them manage 40%.

CONTINUED....

http://www.forbes.com/forbes/2010/0719/opinions-taxation-tax-havens-banking-on-my-mind.html

This would beat the alternative. Not austerity, the guillotine.

[hill2016]

8. yeah well

this article is dumb.

Firstly most of this money doesn't have any US links so what business does the US have taxing it.

Secondly most of this people are foreigners so "offshore" just means "overseas" which is where the money originated from anyway.

[Octafish]

9. Really? The author is a top writer at Forbes. His analysis is spot-on.

While the "international" angle is a nice diversion, you really need to read more on this subject. Try Lucy Komisar:

http://www.thekomisarscoop.com/category/offshore/

Ex-Sen. Phil Gramm and Former President Bill Clinton, each instrumental in repealing Glass-Steagall, have teamed up at Swiss Bank UBS in a new spirit of Buy Partisanship:

http://financialservicesinc.ubs.com/revitalizingamerica/SenatorPhilGramm.html

Here, let me paint a picture:



If you learn anything, please let me know. Until then, LOL!

[hill2016]

10. like I said

"offshore wealth" sounds bad, until you consider that most of these assets were generated overseas in the first place. Does the US have any claim to this overseas wealth?

His only verifiable fact in the whole article is

"By my estimate, there is $15 trillion to $20 trillion in private wealth sitting offshore in bank accounts, brokerage accounts and hedge fund portfolios"

Everything else is speculation or he doesn't have the facts to back it up.
- claims that it's "completely untaxed". Proof please.
- claims it belongs to: arms dealers, dictators, drug barons, tax evaders. Proof please.
- "Much offshore wealth derives from capital flight and the proceeds of past and present tax evasion. Another source is crime. At least a third comes from developing countries–more than their outstanding net foreign debt": proof please.

[Rex]

11. Smart, get a jump on it before the next collapse.

That way you lose less and still pick up more at the end of the slump.

[pampango]

12. The far right will see it as a One World Government idea but countries need to cooperate

to prevent this from happening. Big corporations routinely take advantage of the unwillingness of governments to cooperate.