The document summarizes ongoing financial scandals involving major Western banks such as Royal Bank of Scotland, Barclays, HSBC, JP Morgan Chase, and Bank of America. These scandals include manipulating interest and foreign exchange rates, misleading investors, and pushing small businesses into default. Despite fines, the banks continue posting record profits while inequality grows between the super rich and ordinary citizens. The document argues this is due to an alliance between the super rich, bankers, and politicians, where wealth is siphoned from the majority through dubious banking strategies. In contrast, Islam forbids this alliance and assigns wealth distribution according to Shariah law for the benefit of society.

1. Financial Scandals in the West are fuelled by the Super Rich and their Bankers
Written by Abed Mustafa
Sunday, 08 December 2013 14:15
The UK media is once again reporting another banking scandal involving the Royal Bank of
Scotland. This time the bank is under scrutiny for two offences: one, a report by the
businessman and government adviser Lawrence Tomlinson, which claims that the bank
deliberately pushed viable businesses into default in order to take over their assets on the
cheap; the other, from Sir Andrew Large, former deputy chairman of the Bank of England, which
concluded that it was not lending enough to small and medium-sized businesses.
Comment
Five years on from the worst financial crisis the world has witnessed in living memory, and there
is no let up in financial scandals involving West's premier banking institutions. In the UK, Royal
Bank of Scotland (RBS) is again the centre of a new banking scandal, involving small
businesses. It was only last month, RBS agreed a $150m settlement with US regulators over
allegations it cut corners in a 2007 sale of $2.2bn of mortgage-backed bonds. The bank is also
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2. Financial Scandals in the West are fuelled by the Super Rich and their Bankers
Written by Abed Mustafa
Sunday, 08 December 2013 14:15
being sued by US mortgage giant Fannie Mae, and two RBS traders have been suspended
amid an investigation into foreign exchange rigging. Another of UK's premier financial institution
Barclays Bank revealed in October 2013 that it was under investigation for attempts by its
traders to manipulate the $4 trillion a day foreign exchange markets. Both Barclays and RBS
alongside HSBC have also been implicated in the fixing of interest rates that include both
London and European interest borrowing rates known respectively as LIBOR and EUIBOR. The
rigging of EUIBOR has also incriminated some of Europe's biggest banks like Deutsche Bank,
Credit Agricole, and Societe Generale (SG).
Across the Atlantic, the story is no different. American banks are mired in huge financial
scandals. In October 2013, JP Morgan Chase reached a tentative $13 billion agreement with
the US Justice Department to settle government agency investigations into bad mortgage loans
the bank sold to investors before the financial crisis of 2008. In the summer of 2013, Bank of
America was embroiled in a foreclosure scandal worth billions of dollars. Misleading investors
seems to be the hallmark of American banks. In 2010, Goldman Sachs agreed to a record
$550m fine to settle civil fraud charges of misleading investors.
Yet, despite the hefty fines many of the aforementioned banks continue to post record profits.
For instance RBS posted a profit of $658 million in the 3rd quarter of 2013, and Bank of
America posted a profit of $2.5 billion in the same period. Higher profits for Western banks
coincides with rising wealth for the super rich and decreasing wealth for the ordinary citizens of
Western countries. For instance in America, the super rich have become richer since the
financial crisis. According to Forbes Magazine the 400 wealthiest Americans are worth a record
$2.02 trillion, up from $1.7 trillion in 2012, a collective fortune slightly bigger than Russia's
economy. In the UK, the number of Britons earning more than £1million a year has almost
doubled to 18,000, over the past 2 years. Most of these people work in the financial sector.
Matthew Whittaker, senior economist at the Resolution Foundation, which works to improve
living standards, said the richest had bounced back since the 2008 financial crisis. He also
mentioned that the inequality between rich and poor is the highest it has ever been. He said,
"For most people in the bottom three-quarters or so, wage growth pretty much stalled from
2003. But hidden behind all that is a new phase of inequality, where the top 10 per cent – but
more particularly the top 1 per cent – are moving away from the rest of society."
It is quite apparent that the capital of the super rich is responsible for much of the inequality in
wealth witnessed in the West. The super rich deposit some of their vast capital in these banks,
and the bankers work on their behalf to make their capital grow. The growth in capital takes
place by bankers adopting dubious strategies that involve fixing interest rates, misleading
investors and selling unsound financial products. When such tactics are exposed to the public in
Western countries, the super rich through their army of hired politicians and media pundits are
able to engineer circumstances that always protect their wealth at the expense of the majority.
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3. Financial Scandals in the West are fuelled by the Super Rich and their Bankers
Written by Abed Mustafa
Sunday, 08 December 2013 14:15
For instance, using tax payers' funds to pay for the recklessness of the bankers or by imposing
financial fines that are easy to meet.
Even new legislation enacted by governments to penalise the bad behaviour of bankers, fails to
prevent banks from fleecing the ordinary people. This is because the legislation is drafted by
supporters of the super rich, and politicians ensure that new banking regulation is peppered with
enough loop holes to assist bankers in their financial irregularities. In return for their devilish
work, politicians secure the support of the super rich for future re-elections. In this way, the
super-rich have crafted a financial system, which is a closed circuit and wealth continues to
pour into their hands at the expense of the majority. Hence, it is no surprise to discover that six
years on from the financial crisis, banking institutions are embroiled in ongoing scandals, the
super rich are getting richer, and the politicians lack the spine to stop them.
In Islam, the alliance between super-rich, bankers and politicians to siphon money from the
majority of the people is forbidden. Allah says:
ِ‫ﻡَﺍ ﺃَﻑَاءَ اﻠﻞَّﻩُ ﻉَﻝَﻯ ﺭَﺱُوﻞِﻩِ ﻡِﻥْ ﺃَﻩْﻝِ اﻞْﻕُﺭَﻯ ﻑَﻝِﻝَّﻩِ ﻭَﻝِﻟﺮَّﺱُوﻞ‬
‫ﻭَﻝِﺫِﻱ اﻞْﻕُﺭْﺏَﻯ ﻭَاﻞْﻱَﺕَاﻢَﻯ ﻭَاﻞْﻡَﺱَاﻚِﻳﻦِ ﻭَاﺐْﻥِ اﻠﺲَّﺏِﻳﻞِ ﻙَﻱْ ﻝَﺍ‬
ُ‫ﻱَﻙُوﻦَ ﺩُوﻞَﺓً ﺏَﻱْﻥَ اﻞْﺃَﻍْﻥِﻱَاءِ ﻡِﻥْﻙُﻡْ ﻭَﻡَﺍ آﺖَاﻚُﻡُ اﻠﺮَّﺱُوﻞ‬
َ‫ﻑَﺥُﺫُوﻪُ ﻭَﻡَﺍ ﻥَﻩَاﻚُﻡْ ﻉَﻥْﻩُ ﻑَاﻦْﺕَﻩُوﺎ ﻭَاﺖَّﻕُوﺎ اﻠﻞَّﻩَ ﺇِﻥَّ اﻠﻞَّﻩ‬
ِ‫ﺵَﺩِﻳﺪُ اﻞْﻉِﻕَاﺐ‬
"whatever booty Allah gives to His Messenger from city dwellers belongs to Allah and to
the Messenger and to near relatives and orphans and the very poor and travellers, so
that it does not become something which merely revolves between the rich among you.
Whatever the Messenger gives you you should accept and whatever he forbids you you
should forgo. Have taqwa of Allah – Allah is severe in retribution."
(Al-Hashr: 7)
Additionally, in Islam Allah ‫ وﺘﻌاﻠﻰ ﺳﺒﺤاﻨﻪ‬is the Law Giver, and the Islamic state does not
suffer the same fate as Western countries where the law is perpetually tampered with to meet
the whims of the super-rich. When the Caliphate returns, it will be an eye opener for the masses
of the world, especially for those living in the West.
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4. Financial Scandals in the West are fuelled by the Super Rich and their Bankers
Written by Abed Mustafa
Sunday, 08 December 2013 14:15
Written for The Central Media Office of Hizb ut Tahrir by
Abed Mustafa
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