After a two-year investigation, the ACCC (Australian Competition and Consumer Commission) has laid criminal cartel charges against the ANZ, Citigroup, Deutsche Bank and six senior executives.
The alleged cartel behaviour refers to how investment banks promise “that some proportion of shares will be bought at a certain price” according to this explanation. When they do this they’re called “underwriters” (not to be confused with writers who are down on their luck).
This is big news and shows that the ACCC is taking the case very seriously.
Taking it less seriously: us!
Specifically, we’re asking the question: are these bank cartels like drug cartels made famous by the likes of Narcos?
To figure this out, I set out on a short investigation.
I typed into Google:
“bank cartels – are they actual drug cartels?”
This did not yield the results I intended.
The top search came up as the following:
“Inside Drug Cartels and the Dirty Banks That Serve Them (Webinar Archive)”
I wasn’t sure this was the right direction so I continued on my search.
The next top search is an article in The Guardian titled “Global banks are the financial services wing of the drug cartels” written by a man named Ed Vulliamy. Although his name suggests he is possibly an expert in villainy, something tells me this is not the story that solves this dilemma.
Could this be the lead?
I’m starting to think that perhaps Google doesn’t have all the answers.
Next, I take my search to Twitter. After five minutes, I have learnt absolutely nothing (but I did feel very personally attacked by a joke for its proximity to my own life).
Here’s the thing though. What is a cartel? We’re so used to hearing about them in reference to “drug cartels” that we’ve never thought to question the very essence of them.
Cartels are actually “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.” So it’s not actually drug dealer-specific – we just associate it with narco-notoriety.
Is Netflix to blame for this? Should drug cartels do better PR and make it known what they’re about?
In the end, I asked a very smart friend, who confirmed banks can be caught up in drugs – in the sense that they can be linked to syndicates which launder money for drug dealers. So the syndicates try to find ways around bank rules to launder proceeds of criminal activity. They hope to go under the radar or hide the transactions. You can read more about this here.
Clearly the idea of Brian the banker being a low key crime lord sending threats and taking out the heads of the family is extremely far-fetched and ridiculous. We know now that this is not the case here and this changes everything. But that doesn’t mean we aren’t going to be keeping a solid eye on Brian.
But even more importantly, we could be looking at this all wrong.
Banks might not literally be gangsters – at least not in an evil, kind of cool, binge-watchable way.
But are they not gangsters in a different way? They lobby for tax cuts and use their monopoly and power to influence that debate, and they use our money to make more money for themselves while not dealing fairly with us at all.
And that’s not to mention how our innocent Dollarmites accounts were used to get CommBank staff more money in bonuses.
The takeaway from this? Stay on high alert for suspicious activity. Not in a drug-lordy way, but still.