Frauds in Financial industry - Part 2

After briefing the some of the factors, let us go in deep one by one and then we will try to come out to some conclusion, and how can we remedise these issues.

1) Money of PEP:

One of the big nusciance, every country faces, whether developed/developing/un-developed. Starting with the very generic statements, PEP's are nothing but many HNI who are politically exposed and have very high degree of risk and even after that they put a considerable portion of amount in the financial sector and indirectly through various money generating business and then putting them in financial instruments.

What I want to say is that, these PEP's ate money out of the public coffers, it is pretty much evident from the existing factors to believe that even in the so called developed contries there are kickbacks and indirect corruption, and then put in some financial instruments. For banks , they want to grow their business and when they have got such a powerful person, why they would say no to them. There are large donations made to these so called democrats and republicans , and you think they are charitying, no , they are paying to get some international deals that some time runs in billion of dollars.

Secondly these PEP for their profits, increase the prices, and let the every penny got from the sales come to them and then get into the financial instruments. The best example is from Saudi Arabia, where the kings are, not directly, increasing the prices of the crude, and then ivesting it again in the citibank. It clearly shows there is some political advantage to be made out of it, if not sooner, then later.

Thirdly, there is always an increase in the real estate prices when ever the market is booming and that too in the area which no one previously liked to live, and even without the basic civic amenities. How this is done, to inflate the prices. All the dirty politics come into the picture. Lets take an example of Gurgaon in India. What makes it so special that even in a short span of 2-3 years , the real estate prices shoot like the rocket. I fully agree, the economy booming, industries growing, new means of earning are there, but is there sufficient basic civic amenities ? Answer is no, and even then the prices are climbing. How? Throgh the political advantage , take the land at a dirt cheap price, even that is much higher for landlords, they were not elligible for, and then sell them to the corporates at a higher price, inflating the price of land. Thus making common man to pay highly inflated prices even to get a rented appartment, forget of even buying it.

What i want to communicate is that, all the ill gotten money comes into the financial industry and that too without proper checks, even thogh we have lot of regulations, acts and KYC programms.

I will let you know later how this ill gotten money created a havoc in the finanical industry.

This is all for today. In my next blog, will write on the consequences and the tumbling of financial industry due to the involvement to the PEP's ill gotten money.

Till then, enjoy reading and brainstorming the real cause of financial mayhem.