More fallout from the latest bank frauds

Today saw the presentation by Mervyn King, the head of the Bank of England (BoE) to parliament to explain his position over Barclays banks deliberate misreporting of the LIBOR (London Banking Interchange Rate) responding to allegations from Barclays senior management that their reporting of the rate was tacitly approved by the BoE. It must have been difficult for the attending MPs to keep a straight face whilst he stated that he was unaware of the misreporting until last week. This must have been particularly amusing given that at the same time a similar presentation was being given across the pond to Congress that the US banking regulators were made aware of the fraud by a whistleblower within Barclays several weeks ago, and that the US regulator had informed the BoE and the Financial Services Authority in the UK of the fraud and had expected the UK regulators to take immediate action. Are we really expected to believe that the head of the BoE wasn't made aware that one of the largest UK banking organisations was engaged in illegal activity, or at the very least that he wasn't briefed before going before parliament?

This goes beyond simple incompetence to something far darker. In order for this situation to have any credibility there would have to be a complete suspension of intellectual and critical analysis on the part of the viewing public and since that is not the case we should probably look a little closer at what might be going on. Lets start with the role of the FSA in the UK. The FSA is the watchdog for the entire financial services industry and as such has responsibility to investigate and act on information that a financial organisation was acting irresponsibly, let alone illegally. The BoE in its turn is responsible for the operation of banks within the UK and as such should have fully investigated any suggestion that illegal activity was occuring. Either the FSA and the BoE completely failed in their required tasks, in which case both are unfit for purpose and need to be investigated themselves, or there is a deeper conspiracy to allow banks to operate in whatever way they see fit, regardless of laws or corporate responsibility.

This may seem an extreme suggestion but let us look at another news story coming out of America today. It appears the HSBC another major bank has been acting illegal by facilitating a large scale money laundering operation through its Saudi Arabian banking operation, HSBC staff coaching Saudi individuals on exactly how to avoid the strenuous efforts to prevent exactly this activity. It further appears that this money is profit from drug trafficking operations, so not only is a bank acting illegally in breach of international banking laws but it is also flouting Americas anti-drug stance. The only way that these, and other illegal activities can be taking place with such regularity is if the leaders of these banks believed that they were immune to prosecution and that the banks themselves were operating above the law. Of course, if that was the situation it would mean that someone had suggested to the banks that this was the case. Who could have that sort of power? There are two possibilities, either the US and UK governments are so in awe of the banks that they have effectively given them carte blanche to operate as they see fit, or there is a group above the governments that is operating by a completely different set of rules. Perhaps the stories of the Illuminati are not so crazy after all.