Libor Rate Scandal Overview (Joshua Privett)

We regularly comment here about our ability to beat bank rates. Banks could offer the rates we do, they simply choose not to. 70% of all foreign exchange transfers go through Banks, and because few still think to look for an alternative, they continue to charge high prices for transfers by offering uncompetitive exchange rates, and taking their profit on those margins. I was a victim of this when I moved to America for a year at university – as a student I still lost over 3000 pounds to fees and uncompetitive exchange rates over the course of the year, only realising the scale much later.

Why do Banks not compete with each other to offer better rates? The simple answer is, there is an unspoken agreement between them all. The libor rigging scandal - http://www.bbc.co.uk/news/business-32903415 – which has finally gone to court, is an example of how damaging this collusion between employees at various banks can be.

What the papers do not explain is how they manipulated the exchange rates to get larger profits. The various traders spoke in online chat rooms, calling clients derogatory names and working together to make huge profits on transfers, much more than they should, by timing transfers together with their criminal peers. For example – four traders will push through deals at the same time – this change in demand changes the market price for purchasing that currency, pushing the rate in the right direction for a fifth trader to take a much bigger margin against their client without the client being aware of the change.

The scale and volume of this criminal activity have led to record fines in the hundreds of millions for high street banks.

This blog was conceived to offer freely available public information for those looking to engage in a potential treacherous market, and make sure they have all the knowledge available to achieve the best rate on their transfer.

Not only that but we can also offer free quotes on your transfer. As a specialist currency brokerage, who have been in business for over 15 years, we are well positioned to offer you the best exchange rate, and highlight buying or selling opportunities to maximize your returns. We are what banks choose not to be.

The Euro has gained against the Pound in the short term today, but the Interbank Rate is still above 1.4, presenting a tempting opportunity for those looking to purchase Euros. Contact me on [email protected] overnight for a free quote and advice on how to navigate the markets over the next few months.