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Meet the bureaucrat who had the courage to tell the truth (and probably won’t have a job tomorrow)

February 20, 2015

Meet the bureaucrat who had the courage to tell the truth (and probably won’t have a job tomorrow)

It’s not very often that you hear a senior government official refer to their economic situation using the word ‘crisis’.

Yet with uncharacteristic bluntness of any government official anywhere, at least one senior Chinese government official is sounding the alarm bells.

And he would know.

Guan Tao oversees the foreign exchange of China’s $4 trillion stockpile of reserves, so he has an incredibly unique view of capital flows and currency movements in and out of the country.

Currency movements and capital flows are extremely interesting indicators.

They don’t necessarily tell you that there’s a problem. They tell you that people have figured out there’s a problem.

Look at Greece, for example.

The government is bankrupt, another default is looming, and the country is literally about to run out of money. It’s pretty obvious that there’s been a problem for a very long time.

But the central bank data in Greece now shows that roughly 8% of all customer deposits have vanished from the Greek banking system so far this year.

That’s an astonishing figure.

 

…click on the above link to read the rest of the article…

Big Banks Are Fined $4.25 Billion in Foreign Exchange Scandal – NYTimes.com

November 12, 2014

Big Banks Are Fined $4.25 Billion in Foreign Exchange Scandal – NYTimes.com.

Updated, 10:46 a.m. | LONDON — British, American and Swiss regulators fined some of the world’s biggest banks a combined $4.25 billion on Wednesday for conspiring to manipulate the foreign currency markets, the latest setback for an industry facing increased scrutiny and mounting legal costs for its past sins.

The fines come as regulators are increasingly targeting a business culture in the financial industry that they say encourages improper conduct by its employees. The banks could still face criminal charges in the matter.

At issue is the approximately $5.3 trillion traded each day in foreign exchange – the world’s biggest financial market. The exchange rates are set daily, and traders at the big banks that are being fined, as well as other banks still under investigation, were accused of rigging the rates so that their own banks could profit.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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