Sunday, July 8, 2012

Canadian regulator: Libor rigging went on until 2010

The Guardian reports that according to an affidavit filed in an Ontario court, banks were involved in an effort to manipulate the Libor interest rate until at least 2010.

An investigation in Canada alleges that interest-rate rigging by staff working for British banks and financial institutions continued until at least June 2010, more than a year after Barclays' derivatives traders were found to have colluded in such practices.
An affidavit filed in Ontario's superior court by the criminal matters branch of Canada's competition bureau alleges that traders working for the British banks HSBC and RBS, as well as the broker Icap, conspired to fix rates relating to Japanese yen trades for personal gain. Traders from Deutsche Bank, JP Morgan and Citibank Canada are also said to have taken part. All contest the claims.
Given that the Bank of England set the standard with Barclays that the Chairman of the Board, CEO and the next in line have to resign if a bank admits that it was manipulating Libor, you can expect HSBC to vigorously contest the allegations (RBS already saw these individuals dismissed).
The competition bureau is being aided in its investigation by Swiss bank UBS, which has turned whistleblower and agreed to hand over key documents, emails and transcripts that are expected to shine new light on the nature of the alleged collusion between staff at the banks. 
According to the affidavit, UBS has "provided the bureau with information that, during the material time, the participant banks, at times facilitated by the cash brokers, entered into agreements to submit artificially high or artificially low London interbank offered rate (Libor) submissions in order to impact the yen libor interest rates published by the British Bankers Association". 
The affidavit hints that evidence produced in Canada will be shared with other countries, including the UK, investigating the scandal. It says: "The alleged conspiracy is international in nature and is currently being investigated in foreign jurisdictions. The bureau is co-ordinating its investigation of the alleged international conspiracy and co-operating with these foreign jurisdictions."

1 comment:

Anonymous said...

Perpetrators need to be tried in a criminal court and if found guilty, sent to jail, fined and barred from working in financial industries thereafter.