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UBS facing US$1b fine over Libor rate scandal
Source: Agencies |
December 18, 2012, Tuesday
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UBS AG is expected to be hit with a US$1 billion-plus fine to settle charges of rigging Libor interest rates this week, making it the second bank to be brought to book for its role in the global scandal.
The fine, to be imposed by regulators in Britain and the United States, would be the latest blow for the Swiss bank that suffered a rogue trading scandal last year, paid a US$780 million fine to settle a US tax investigation in 2009 and nearly collapsed in 2008 due to huge subprime losses.
Sources familiar with the matter say the fine will be US$1 billion or more, which would be more than double the US$450 million levied on British bank Barclays Plc in June for interest rate manipulation.
The penalty could be as high as US$1.6 billion and UBS will admit 36 traders around the globe manipulated yen Libor between 2005 and 2010, Swiss newspaper Tages-Anzeiger said, citing unnamed sources.
The settlement will be with US, British and Swiss regulators, although the last has no power to fine the bank. Japanese regulators are also involved, some sources said, although it was not clear if they would be formally involved in the penalties.
UBS will admit to criminal wrongdoing by its Japanese arm, where one of its traders manipulated yen Libor and euro yen contracts, sources said.
Admitting to criminal wrongdoing can be fatal for a bank, as it can lose its license but by admitting to wrongdoing at its Japanese subsidiary, UBS would be stopping short of admitting to wrongdoing at a group level.
The fine, to be imposed by regulators in Britain and the United States, would be the latest blow for the Swiss bank that suffered a rogue trading scandal last year, paid a US$780 million fine to settle a US tax investigation in 2009 and nearly collapsed in 2008 due to huge subprime losses.
Sources familiar with the matter say the fine will be US$1 billion or more, which would be more than double the US$450 million levied on British bank Barclays Plc in June for interest rate manipulation.
The penalty could be as high as US$1.6 billion and UBS will admit 36 traders around the globe manipulated yen Libor between 2005 and 2010, Swiss newspaper Tages-Anzeiger said, citing unnamed sources.
The settlement will be with US, British and Swiss regulators, although the last has no power to fine the bank. Japanese regulators are also involved, some sources said, although it was not clear if they would be formally involved in the penalties.
UBS will admit to criminal wrongdoing by its Japanese arm, where one of its traders manipulated yen Libor and euro yen contracts, sources said.
Admitting to criminal wrongdoing can be fatal for a bank, as it can lose its license but by admitting to wrongdoing at its Japanese subsidiary, UBS would be stopping short of admitting to wrongdoing at a group level.
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