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Thirteen big banks colluded to shut out competition from the multi-trillion euro derivatives market, according to an investigation by the European Commission. The EU’s executive arm said that its investigation, which began in 2011, had uncovered anti-competitive practices during the 2008-9 financial crisis. The commission investigation focuses on the credit default swap (CDS) market which allows banks and businesses to hedge against possible losses. However, more controversially, they were used by Goldman Sachs and others to speculate on the probability of a Greek debt crisis in 2010. There are almost 2 million active CDS contracts with a joint notional amount...

That old line from the Marx Brothers came to mind last week as MF Global, the brokerage firm run by Jon S. Corzine, was felled by over-the-top leverage and bad derivative bets on debt-weakened European countries. Suddenly, all of those claims that American financial institutions have little to no exposure to Europe rang hollow. You can understand why Wall Street wants to play down the threats from Europe. Its profits depend on the market’s confidence in the products it sells — and on the belief that the firms that sell those products will be around tomorrow. But MF Global provides...

<p>International momentum is building for stricter oversight of derivatives trading, as a top U.S. regulator recommended new limits on credit-default swaps and European leaders pushed for a ban on speculative bets against government debt following recent financial turmoil in Greece.</p>

What Is Really Killing the Big Banks?   By Christopher Whalen | Friday, February 13, 2009   As the Obama Administration performs triage on the housing and credit markets, one of the most damaging aspects of the financial crisis has been largely overlooked. Christopher Whalen, hailed by Nouriel Roubini as one of the leading independent analysts of the U.S. banking system, explains the problem of credit default swaps.One of the least understood aspects of the financial crisis — but potentially the most damaging — is the market for over-the-counter derivatives and particularly one type of derivative known as a...

When the Federal Reserve policymakers decide on interest rates Tuesday, investors will probably look one step beyond their decision, to gauge how much money will the Fed be willing to print once it is out of rate ammunition. Rates won't likely hit zero Tuesday, but this could be unavoidable in the near future, according to strategists and market experts. ... Printing Money The Fed has already moved on from using interest rates as a monetary policy tool and the next fed funds target rate after the Dec. 16 meeting is "almost academic," ING economist Rob Carnell said. The Fed's balance...

Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities and a fixture of the Wall Street trading world for decades, was arrested Thursday morning by Federal Bureau of Investigation agents and charged with criminal securities fraud by federal prosecutors in Manhattan. Press Release of Bernard Madoff's ArrestThe criminal complaint filed against Mr. Madoff alleges that he told senior employees Wednesday that his business was "a giant Ponzi scheme," according to a person familiar with the matter. The alleged scheme involved tens of billions of dollars, but the extent of investor losses wasn't immediately clear. The disclosure came after...

NEW YORK (Reuters) – Bernard Madoff, a long-time fixture and powerful adviser on Wall Street, was arrested and charged on Thursday with allegedly running a $50 billion Ponzi scheme, U.S. authorities said. The former chairman of the Nasdaq Stock Market who remains a member of Nasdaq OMX Group Inc's nominating committee, is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he founded in 1960. But the alleged fraud involved a hedge fund he ran from a separate floor of the building where his brokerage is based. Madoff told senior employees of his...

A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking. Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths.

Bond insurers want $125bn of cover wiped out By Aline van Duyn in New York Published: June 22 2008 23:30 | Last updated: June 22 2008 23:30 Bond insurers such as Ambac, MBIA and FGIC are talking to banks about wiping out $125bn of insurance on risky debt securities in what could be the only way to limit the financial damage surrounding the bond insurers.