Business

UBS traders tried to rig key Hong Kong interest rate

General night-time view of the Hong Kong cityscape
Image caption The HKMA found no evidence of collusion in attempted interbank lending

Traders at Swiss bank UBS made around 100 attempts to rig a key lending rate called Hibor, the region's financial regulator has said.

The Hong Kong Monetary Authority (HKMA) found internal chat messages which contained "change requests" between 2006 and 2009.

The requests were made "with a view to rigging the Hibor fixing" HKMA said.

But the regulator said it found no evidence of collusion with other banks in the region to rig the rate.

Hibor stands for Hong Kong Interbank Offered Rate and is the rate at which banks lend to each other.

The regulator found "material weaknesses" in UBS's internal controls and governance in managing the Hibor submission process and "in other areas", it said in a statement.

HKMA said that it was "unacceptable" that UBS had failed to report the misconduct to authorities.

In a statement UBS said: "We are pleased that the investigation of the HKMA returned the same results as our own internal investigation - no collusion among banks and no noticeable impact on the fixing of Hibor from any conduct occurring during the period in question.

"We have not been part of the HIibor fixing panel since 2010 and have taken appropriate steps to incorporate the HKMA's suggested improvements into our operations."

However, the regulator said it was still considering whether further sanctions would be required.

Wider investigation

The investigation is the latest in a series of scandals relating to attempts to rig global interbank lending rates to have emerged since the summer of 2012 and which stretch back almost a decade.

In June 2012 Britain's Barclays Bank was fined a record £290m by both UK and US financial regulators after it admitted to attempting to rig the London interbank offered rate (Libor), ultimately leading to the resignations of the bank's chief executive Bob Diamond and its chairman Marcus Agius.

At the end of the same year UBS agreed to pay £900m to settle charges that it attempted to rig Libor, providing the first evidence the practice was more widepsread than was previously known.

UBS has since escaped regulatory action for helping European financial regulators in their investigation of manipulation of the Euribor - Europe's equivalent to Libor.

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