Everyone strives for comfort and complete safety. At the same time, the safety of property and cash is a priority. Most people trust the storage of their savings to banks. The main difference between the financial institutions selected for deposits is the territorial location. If the majority of clients choose national organizations, the remaining small group prefers credit organizations, the status and image of which has been confirmed for years, even centuries of work. These primarily include banks in Europe.
"Gentlemen" from the Old World
These organizations are the oldest credit and financial institutions in the whole world. For a long period of time, some of the most “strong” and best banks were considered institutions of Switzerland. At this stage, stable and effective banks in Europe include institutions in their list located in other countries. It is noteworthy that the development of the world sphere of financing, investment and lending is significantly influenced by the institutions of the Old World. The reason for this is the unification of European countries under the auspices of the European Union. The introduction of a single currency made it possible to more effectively consider proposals for the injection of cash flows into projects of various countries. And with varying success, manipulate refinancing indices. Ultimately, due to the “game” with international lending rates, many European banks are “under attack” by the antimonopoly committee. This commission is going to apply large financial sanctions to many credit institutions.
German "games"
Due to manipulations with refinancing rates, a high-ranking Deutsche Bank (Germany) is forced to postpone about 1 billion 200 thousand euros for litigation. And this is only for the first hearing. The sad fate of this organization was also shared by JP Morgan Chaise, HSBC and many others. The European Union Antimonopoly Committee accuses these institutions of manipulating the Libor rate (London Interbank Offer Rate). The result of this grandiose story was a fine of two and a half billion euros.
Not recovering from the shock, the German bank was again involved in the second scandal. This time, the commission revealed irregularities in the process of setting the average funding rate for Euribor. In simple terms, this index shows the percentage at which European banks borrow money for a certain period. This refinancing tool is also called the international offer rate.
In this case, the scandals surrounding this issue adversely affected the overall income of the institution. Compared with the previous year, in 2013, the net profit of Deutsche Bank decreased 15 times and in the penultimate quarter amounted to just a little more than 50 million euros.
Sad "ally" from Switzerland
The participant of the sad event regarding the “game” with Libor bet is also the well-known UBS-bank (Switzerland). Having paid a huge fine, the organization “closed” 2012 with a deep minus of 1.7 billion euros. 2013 was more successful in the activities of a financial institution. Although the bank turned the work into a profitable channel, the planned 15% profitability, alas, was not received.
Many financiers will undoubtedly agree that for the entire world economy the banking “games” of the institutions of the Old World cannot end in anything good: organizations, investors, countries and continents suffer losses. Many lending institutions are in danger of ruin.