UBS fined $1.4b for Libor manipulation
THE Swiss investment bank UBS must pay about $US1.5 billion ($1.4 billion) to US, British and Swiss regulators for trying to rig global interest rates - triple the penalties levied against British bank Barclays.
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.