Bafin, Germany's financial market regulator, is coming to the end of its probe into the Citigroup eurozone government bond affair which caused uproar in the market in August. Citigroup traders dumped billions of dollars worth of bonds onto the market, prices plunged, rivals sold futures in panic and the Citigroup traders came back in and repurchased some of the instruments on the cheap. Citigroup is said to have made a tidy sum out of the affair, whilst rivals are thought to have lost $22m.
The world's largest financial services company later came out and admitted that what its traders did was probably not very sportsmanlike. Germany's regulators have been looking into the matter to determined whether Citigroup was guilty of market manipulation. Expect lawsuits should the regulator find against the firm.
And its all eyes on Bear Stearns again. As the firm seemingly goes from strength to strength and the bank's shares trade near an all-time high, analysts are wondering if Bear CEO Jim Cayne can be tempted into a deal with one of the big boys. Citigroup, Deutsche and HSBC have all been recently mentioned as possible buyers.
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