HKMA widens probe into banks for possible misdeed linked to Hibor
Source: Bloomberg News |
June 19, 2013, Wednesday
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Print Edition
Print Edition
THE Hong Kong Monetary Authority has expanded an investigation into possible misconduct linked to the city's benchmark rates to HSBC Holdings Plc and other lenders following crackdowns from the US to UK, Japan and Singapore.
The HKMA's probe, which started with UBS AG in December and has since been widened to "a number" of banks, is continuing, it said in a statement yesterday. London-based HSBC, whose shares are listed in Hong Kong, has been asked to "promptly implement" remedial measures required by the Monetary Authority of Singapore last week following a similar investigation in the city-state, HKMA said.
The review into the submission of data by banks for setting the Hong Kong Interbank Offered Rate and other benchmarks comes amid increased global scrutiny. Singapore last week censured 20 banks for bids to rig its rates and asked them to set aside US$9.6 billion pending steps to improve controls, while Britain's market regulator began looking into the currency market after Bloomberg News reported that traders had manipulated key rates.
The HKMA's review has included "millions of communication messages records" so far, according to the statement, which signaled that the probe may take a year because of the number of documents. The regulator will also consider whether any potential misconduct may have had a material impact on the rate, it had said in December.
Adam Harper, a spokesman for HSBC in Hong Kong, declined to comment on the HKMA statement.
The regulator said it began its probe into Zurich-based UBS after overseas regulators alerted the HKMA about potential manipulation into rates. Preliminary information provided by one foreign regulator indicated that the potential misconduct was by staff, rather than a problem with the bank's systems, HKMA Deputy Chief Executive Arthur Yuen said in December.
In February, the HKMA moved administration of setting interbank lending rates in the city to the Treasury Markets Association from the banks' lobbying group. Rate fixings that have little demand, such as four- and five-month rates, will also be phased out, the HKMA said at that time. Other measures included a decision to review the list of reference banks that submit the Hibor rates every year, instead of every two years.
On June 14 the MAS said a yearlong review revealed 133 traders at 20 banks tried to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks from 2007 to 2011.
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