Recent Financial Sector Conspiracies and Manipulations: How to Prevent Future Similar Conduct?

By Rosa M. Abrantes-Metz

While investigations into Treasury auctions, FX, ISDAfix, and others are still ongoing, and more recently additional focus by regulators has been given to possible collusion and manipulation in bid-ask spreads in bonds for supranational, sub-sovereigns and agencies bonds markets, bid-ask spreads in foreign exchange, and maybe even other spreads manipulations in other markets, we should learn the lessons from LIBOR and other benchmarks. We must recognize deficient structures so that we can proactively reform them, minimizing the likelihood of abuse. And to enhance deterrence and detection of illegal behavior, we must screen these markets regularly.