What is wrong with the international banking system? In order to maintain sustainable global economic growth, the banking system needs to be functional and profitable. Bank shareholders should be enjoying declining default rates that result in stable dividends and better capitalization. Instead we get this:
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- Bloomberg: – The paper is the first to raise the possibility that the five banks overseeing the century-old rate — Barclays Plc, Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA — may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.
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- NY Times: – Barclays said on Tuesday that it would cut as many 12,000 jobs this year, or about 8 percent of its work force, as part of a painful restructuring that began a year ago. The chief executive of the British bank, Antony P. Jenkins, has been trying to overhaul Barclays and revive its image in the eyes of British consumers after a series of scandals in the last few years, including the manipulation of global interest rate benchmarks. Mr. Jenkins took the top job in 2012 after the ouster of Robert E. Diamond Jr.
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- Forbes: – Fraudulent dealings by a client tied to Mexico’s oil industry have landed Citigroup’s subsidiary in the country in trouble and forced the bank to revise its previously-reported 2013 earnings. According to the bank’s announcement Friday, Mexican subsidiary Banamex extended $585 million of credit to an oil services company in Mexico known as OSA. The financing was for accounts receivable from the country’s state-owned oil business Pemex, which informed Citigroup that the valid receivables were far less than the figure held up by OSA.
