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Australian regulators accuse ANZ of rate-fixing

ANZ logo Image copyright AFP

Australia's markets watchdog has begun legal action against ANZ bank over accusations it fixed the benchmark inter-bank interest rate.

The Australian Securities and Investment Commission accused ANZ of "unconscionable conduct and market manipulation".

The charges relate to ANZ's involvement in setting the Bank Bill Swap Reference Rate between March 2010 and May 2012.

In a statement, the bank rejected the allegations.

Market manipulation

The commission alleges that the bank "traded in a manner intended to create an artificial price for bank bills on 44 separate days" during the period in question.

"ASIC alleges that ANZ was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to ANZ's."

The Bank Bill Swap Reference Rate (BBSW) is the primary interest rate benchmark used in Australian financial markets.

It is Australia's equivalent to the Libor in the UK and is used as a reference rate for banks lending money amongst each other.

In a major scandal which emerged in 2015, several banks in the UK were found to have conspired to influence the Libor by agreeing among themselves to fix the rates.

Barclays Bank, JP Morgan, Swiss bank UBS, Royal Bank of Scotland and Deutsche Bank have all been fined by financial regulators for this practice, which is seen as market manipulation and corrosive to trust in the financial markets.

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