Moreover the derivatives market is steadily growing. Yet incredibly, we have little information about it or its implications for the financial strength of any of the big banks. That is more than ten times the size of the entire world economy. The worldвЂ™s scariest story: trading in derivativesД«ad as these scandals are and vast as the money involved in them is by any normal standard, they are mere blips on the screen, compared to the risk that is still staring us in the face: the lack of transparency in derivative trading that now totals in notional amount more than $700 trillion. Misleading clients with worthless securities: Only after the financial crisis of 2008 did people learn that banks routinely misled clients, sold them securities known to be garbage, and even, in some cases, secretly bet against them to profit from their ignorance.taxpayers avoid taxes on at least $1.2 billion for a nearly ten years. has been indicted on criminal charges for helping U.S.

Now, the oldest Swiss bank, Wegelin & Co. taxpayers with assets of about $20 billion hide their identities from the IRS. Tax evasion: Two Swiss banks were involved in Switzerland-based.government officials of helping Mexican drug dealers launder money (HSBC), and of funneling cash to Iran (Standard Chartered). Large global banks have been accused by U.S. Money laundering: Accusations of illegal, clandestine bank activities are also proliferating.Just this week, big banks agreed two settlements totaling $20.15 billion for foreclosure abuses. вЂњMany of the biggest banks now stand accused of manipulating the worldвЂ™s most popular benchmark interest rate, the London Interbank Offered Rate (LIBOR). Trading gone awry: JPMorganвЂ™s loss of $6 billion from trading activities of which CEO Jamie Dimon was blissfully unaware.Thus the biggest risk we face is not the stories of repeated wrongdoing by the banks that are still making headlines, such as: Today's financial scandals are mere sideshows Because the scale of the trading is larger, and because the depleted government treasures are not well placed for another huge bailout, the impact will be worse than 2008. What we can say with virtual certainty is that if we continue as now is that it will happen. We canвЂ™t say which bank or which particular instrument will trigger the debacle. Because all the big banksвЂ™ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode. After LehmanвЂ™s collapse, no one could understand any particular bankвЂ™s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. The problem at the core was a lack of transparency. The root cause wasnвЂ™t just the reckless lending and the excessive risk taking. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldnвЂ™t afford it, and distinguished analysts openly predicting this could only end badly. Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating.

They say this is a big rich town