UBS fined $1.4b for Libor manipulation
Fines from the US Commodity Futures Trading Commission and the US Department of Justice total $US1.2 billion. UBS will pay £160 million to Britain's Financial Services Authority and Sfr59 million in profits to the Swiss Financial Market Supervisory Authority.
"Clearly, this chapter isn't positive," UBS chief executive Sergio Ermotti said. "We want to move forward and I think we're showing our determination in the bank to move forward and to change the bank for good. It's important to recognise mistakes like we do, but it's also important to recognise that the bank has changed."
About 30 to 40 people had left the bank as a result of the investigations, Mr Ermotti said, adding that the behaviour of certain employees was "unacceptable".
Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate (Libor) to profit from bets on interest-rate derivatives, or make the lenders' finances appear healthier.
Libor, a benchmark for more than $US300 trillion of financial products worldwide, is derived from a survey of banks conducted each day on behalf of the British Bankers' Association in London. Lenders are asked how much it would cost them to borrow from one another for 15 different periods, from overnight to one year, in currencies including US dollars, euros, yen and francs.
Barclays agreed to pay £290 million in June to resolve Libor probes.
The British finance regulator found more than 2000 documented requests by UBS traders to manipulate rates in chat messages and group emails, and that at least 45 people at the bank knew of the practice over a six-year period until the end of 2010. Bank employees colluded with interdealer brokers and paid them bribes to help manipulate yen Libor submissions by other banks, the FSA said.
"UBS's misconduct was all the more serious because of the orchestrated attempts to manipulate the yen Libor submissions of other banks as well as its own and the collusion with interdealer brokers and other panel banks," said the FSA's director of financial crime, Tracey McDermott.
Frequently Asked Questions about this Article…
UBS was fined for trying to rig global interest rates by manipulating LIBOR submissions. The bank agreed to pay about US$1.5 billion (reported as $1.4 billion), with roughly US$1.2 billion to US regulators, £160 million to Britain's Financial Services Authority (FSA), and Sfr59 million to the Swiss Financial Market Supervisory Authority.
LIBOR (the London interbank offered rate) is a benchmark interest rate used for more than US$300 trillion of financial products worldwide. It’s derived from daily surveys of banks about borrowing costs. Manipulating LIBOR can affect the interest rates on loans, derivatives and other investments that everyday investors and markets rely on, so accuracy and integrity of LIBOR are important to investors.
Regulators found more than 2,000 documented requests by UBS traders in chat messages and group emails asking to manipulate rates. At least 45 people at the bank knew about the practice over about six years up to the end of 2010. The FSA also reported collusion with interdealer brokers and payments to influence yen LIBOR submissions by other banks.
UBS was fined by multiple authorities: the US Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ) (together about US$1.2 billion), Britain’s Financial Services Authority (FSA) (£160 million), and the Swiss Financial Market Supervisory Authority (Sfr59 million).
The UBS penalties were about three times larger than the fines levied against Barclays. Barclays agreed to pay £290 million in June to resolve LIBOR-related probes, while UBS’s combined fines amounted to roughly US$1.5 billion.
UBS chief executive Sergio Ermotti acknowledged the episode wasn’t positive and said the bank wanted to move forward, change for good and recognise its mistakes. He also said about 30 to 40 people had left the bank as a result of the investigations and described some employees’ behaviour as ‘unacceptable.’
Yes. Global authorities were investigating claims that more than a dozen banks altered submissions used to set benchmarks like LIBOR. The probes looked into whether banks profited from bets on interest-rate derivatives or made their finances appear healthier by changing submissions.
The UBS case highlights the importance of benchmark integrity and strong regulatory oversight. For everyday investors, it underscores that misconduct at major banks can lead to large fines, reputational damage and increased scrutiny — and that benchmarks like LIBOR affect a wide range of financial products, so transparency and accurate reporting matter for market trust.
Call 1300 880 160
Start a chat
Schedule a call
