Yes and no. Firstly, these sort of manipulations happen on exchanges too. Historically, the main difference has been that it's in the exchange's interest to spot this stuff quickly and stamp it out.
Also, and this is asset dependent, it's generally easier for an individual to manipulate a stock price than FX or Libor (back in the day) as they're much less liquid. As such, more focus was put on detecting and prevention.
For many FX markets, it's practically unfeasible to manipulate the market without collusion. This is because of the huge liquidity. So the reason why this was a big deal, and the reason for the convictions, was because of the collusion. Without that there wasn't much to see here (arguably there wasn't much of an effect anyway but the private prosecutions should throw more light on that).
Libor is an interesting case. Similar to FX, it was nigh on impossible to manipulate in a liquid market without collusion. It is true that the rules do not apply to an observable rate but, in practice, it was trivial to tell if a single institute was doing something fishy so they didn't.
Where it all went to crap was when the banks stopped trusting each other. Libor is the uncollateralised borrow rate. In the period preceding the crash everyone stopped lending uncollateralised as they weren't sure they would get their money back. As such, the premise of Libor became flawed as it depended on an answer to the question "what rate can you borrow uncollateralised?". It didn't have an option for "there isn't one", and worse, the setters were pressured into not giving an indication that that was true.
So, in the Libor case, if the borrowing had been on an exchange and the rate set from an observable price, things would have been better in the sense that it would be obvious that there was no liquidity (although everyone knew that anyway). But, ironically, it would likely have been much easier to force material moves as a single entity because of that illiquidity. And we'd still end up with the same convictions as they were due to collusion.
Finally, for FX, it's not obvious that an exchange would help for the same reasons. It's difficult to manipulate without collusion because of the liquidity. An exchange won't change that. And exchanges are no less susceptible to collusion than the current FX market. Arguably, they may be more so if there were multiple exchanges each with less liquidity but that's just speculation.
Yes and no. Firstly, these sort of manipulations happen on exchanges too. Historically, the main difference has been that it's in the exchange's interest to spot this stuff quickly and stamp it out.
Also, and this is asset dependent, it's generally easier for an individual to manipulate a stock price than FX or Libor (back in the day) as they're much less liquid. As such, more focus was put on detecting and prevention.
For many FX markets, it's practically unfeasible to manipulate the market without collusion. This is because of the huge liquidity. So the reason why this was a big deal, and the reason for the convictions, was because of the collusion. Without that there wasn't much to see here (arguably there wasn't much of an effect anyway but the private prosecutions should throw more light on that).
Libor is an interesting case. Similar to FX, it was nigh on impossible to manipulate in a liquid market without collusion. It is true that the rules do not apply to an observable rate but, in practice, it was trivial to tell if a single institute was doing something fishy so they didn't.
Where it all went to crap was when the banks stopped trusting each other. Libor is the uncollateralised borrow rate. In the period preceding the crash everyone stopped lending uncollateralised as they weren't sure they would get their money back. As such, the premise of Libor became flawed as it depended on an answer to the question "what rate can you borrow uncollateralised?". It didn't have an option for "there isn't one", and worse, the setters were pressured into not giving an indication that that was true.
So, in the Libor case, if the borrowing had been on an exchange and the rate set from an observable price, things would have been better in the sense that it would be obvious that there was no liquidity (although everyone knew that anyway). But, ironically, it would likely have been much easier to force material moves as a single entity because of that illiquidity. And we'd still end up with the same convictions as they were due to collusion.
Finally, for FX, it's not obvious that an exchange would help for the same reasons. It's difficult to manipulate without collusion because of the liquidity. An exchange won't change that. And exchanges are no less susceptible to collusion than the current FX market. Arguably, they may be more so if there were multiple exchanges each with less liquidity but that's just speculation.