UBS Traders Tried to Manipulate HK Libor

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.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza