Monday, July 4, 2005

Financial Scandals

Nick Leeson and Barings Bank – a case for a multinational financial corporation lost control of a dealer in Singapore.

Internet bubble – this was started in the US, then heavily promoted by analysts, mostly with conflict of interest, of large multinational financial corporations who fabricated a dream called “new economy”. When the world has followed and millions of investors poured in their savings into the stock markets, it exploded.

Corruption, money laundry in general – globalization of the financial system has made things a lot easier than before. In 1998, the IMF lent Russia 8 billion dollars to stave off the collapse of the Ruble. Later that year several billion dollars disappeared from the Russia government account. In 1999, the Bank of New York helped the Russian mafia to funnel $10 billion back into the Russian economy via its Pacific Island State of Nauru, an offshore branch that never asks questions of their customers.

The collapse of Peregrine, a Hong Kong investment bank – a mixture of corruption, globalization of financial markets, expropriation by corporate pyramid etc. The trouble began when an Indonesian taxi company, named inappropriately “Steady Safe” with links to the daughter of then President Suharto defaulted a $265 million (about ¼ of Peregrine’s capital) loan in late 1997.

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