And you’re going to pay how much? The results of banks become litany of provisions recorded face litigation cascading about manipulation of the currency market, forced financial products or suspicion of tax evasion sales.
HSBC UBS, Deutsche Bank, JPMorgan … the biggest names in finance have released their quarterly accounts in recent days. Beyond the various verses of their business affairs, their quarrels with the regulatory authorities have come back as a haunting refrain.
We’re not talking chump change here: banks include in their accounts for future expenses equivalent to hundreds of millions of euros, or more to avoid lawsuits, pay fines, compensate customers.
This proliferation of litigation has “the will of the authorities to be a little firmer after the mistakes of the banking sector. This means the Basel III regulations, but also by attention ways to run everyday banks, “said Christopher Dembick economist at Saxo Bank.
Among these procedures, the case of market manipulation mobilizes exchange investigators from several countries. They suspect an illegal agreement between traders, who would concerted efforts to influence in their favor the daily reference rate
On this huge market -. 5.300 billion transactions per day – any breach of the rules of conduct creates a snow ball effect Financial.
According to sources familiar with the matter, -the six British banks Barclays, Royal Bank of Scotland (RBS) and HSBC, Citigroup US and JPMorgan and the Swiss UBS- negotiate the amount of their penalties with US authorities, but also British. – tip on this issue since 40% of currency exchanges pass through the City of London
The Dow Jones Newswires said Friday that the regulators could announce the amount of compensation imposed on banks by one to two weeks time.
The three British and JPMorgan said the amount of money set aside in this perspective – of $ 378 million for HSBC to a billion dollars for JPMorgan, which is further threatened criminal prosecution in the US
-. Tax optimization –
Citigroup revalued its side down its net income for the third quarter -a coaster rather rarely incorporating new provisions of 600 million dollars “on litigation already known” without specifying.
UBS announced for its part have set aside at the same time 1.8 billion Swiss francs (1.5 billion euros) to cover a range of litigation and regulatory issues, German Deutsche Bank doing the same for 894 million euros.
For a list of legal problems is far from being limited to irregularities in the foreign exchange market. Prior manipulation scandal Libor interbank rate is not at first ended: several institutions, including Deutsche Bank, would be close to a compromise in the UK to settle disputes relating to this matter which has already seen seven other groups financial sanctions.
In the United States, these disputes galore come as banks barely turn the page of litigation related to mortgages “subprime” which earned such a fine 13 billion JPMorgan dollars.
In the UK, institutions hang like a millstone called the forced sale of PPI credit insurance (“Payment Protection Insurance”), a case which led to the only provision the Lloyds whopping 11.3 billion pounds (14.5 billion euros).
All the time the European tax authorities are expanding their research on potential support provided by large international banks tax optimization of clients through complex stock products.
In these circumstances, some bankers complain relentlessness and Mr. Dembick remark that “it is easier to puncture a bank that increase taxes, or the public finances are in trouble in many countries. ” However, he added that “banks have ample means to collect such amounts, including US fines are extremely high.”
With now more strict regulation, these cases should be completed within one or two years, provides the expert.
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