Something that doesn’t seem to have hit the newspapers here, but may turn out to have been significantly affecting little ol’ NZ is a growing forex scandal, mainly in the UK (as the centre of forex trading).
The boss of the UK’s financial regulator has said the the allegations of rate-fixing are “every bit as bad” as the Libor scandal, that caused $US6bn in fines to be handed to banks – which probably still didn’t measure up to their cheating (2 US govt banks estimated they lost $3bn between them as a side-effect).
New Zealand has the 9th most traded currency in the world, despite our small size. Why? We’re a very open stable economy, with strict rules, few surprises, and we’re small and very manipulatable.
It’s known that very large banks can and have caused big shifts in our currency with very large trades – to their benefit. So we’d seem a likely target for the collusion of forex traders that is being discovered here.
RBS and Barclays – 2 of the UK’s biggest banks – have already suspended a number of forex traders, so this will be another financial scandal worth following, as we find out who’s been making us all a little bit poorer…