gata.org / By CHRIS POWELL / Fri, 2014-05-23 14:01
Dear Friend of GATA and Gold:
Here are a few observations on the British Financial Conduct Authority’s finding today that a trader for Barclays Bank manipulated theLondon gold fixing down one day two years ago to cheat a customer, a finding detailed by the FCA here:
http://www.fca.org.uk/news/barclays-fined-26m-for-failings-surrounding-t…
1) The London gold fix, a peculiar and suspect mechanism already the target of class-action lawsuits for market manipulation, has been definitively impugned. But almost any market could have been the venue for what Barclay’s did, because:
2) While the London gold fixing is not an open and transparent market and thus is more vulnerable to manipulation, the sort of manipulation in the Barclays case is not peculiar to the fixing. For with enough money, anyone can manipulate any market. That’s what anti-trust law in the United States and competition law in the U.K. and European Union recognize in principle. Many investment bankshave access to far more money than most traders and even access to far more money than is available to the markets in which the investment banks are trading. Some investment bank money comes effectively from government, especially when government policy is to suppress interest rates to negligible levels.