HKMA raps UBS for role in Hibor fixing
Print Edition
HONG Kong’s monetary authority has rapped UBS AG for its role in the city’s benchmark lending rate fixing case and warned that it would consider additional supervisory actions in light of the Swiss bank’s compliance failures.
Marking the end of a 15-month investigation, the Hong Kong Monetary Authority said yesterday that it has found no evidence of collusion between banks to rig benchmark lending rates after going through messages and e-mails between 2005 and 2012.
But HKMA said it has uncovered material weakness in the way UBS submitted estimated Hong Kong Interbank Offered Rates to the city’s banking association.
“HKMA found about 100 communication records during 2006-2009, in the form of internal chat messages, which contained change requests by several UBS traders to the UBS Hibor submitter with a view to rigging the Hibor fixing,” HKMA said in a statement.
The traders involved no longer work at the firm, a Hong Kong-based spokesman for UBS said, declining to say if they had quit on their own accord or had been asked to leave.
While HKMA estimates the UBS change requests had negligible impact on the actual outcome of the Hibor fixing, it said the Swiss bank’s failure to report its staff’s misconduct to the regulator was unacceptable.
UBS has been at the center of global investigations into rate rigging. It was fined US$1.5 billion in December 2012 by British and US regulators for Libor manipulation, and in June 2013, was one given one of the stiffest punishments in Singapore for attempted manipulation of currency and lending rates in the city-state.
Evidence that UBS may have been involved in attempted rate rigging in Hong Kong materialized in December 2012, when US financial regulators said their probe into Libor manipulation by UBS had found evidence of possible misconduct by the bank in relation to Hibor.
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