Swiss competition watchdog launches probe into role of dozen banks in fixing Libor, Tibor
04 February 2012
Switzerland's competition commission has launched a probe into possible cartellisation by a dozen international banks, including two Swiss lenders, in illegally setting key interest rates.
The probe follows similar investigations launched by regulators in the UK, the US and Japan to see if the banks colluded to fix two key interest rates – the London and Tokyo inter-bank offered rates (LIBOR and TIBOR) – which could have benefited their derivative trades.
The banks include UBS, Credit Suisse, Deutsche Bank, HSBC, Royal Bank of Scotland, Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui, Mizuho Financial Group, Rabobank, Societe Generale, Citigroup and JP Morgan Chase.
''Derivatives traders working for a number of financial institutions may have manipulated these submissions by co-ordinating their behaviour, thereby influencing these reference rates in their favour,'' said the competition watchdog. ''Moreover derivatives traders might have colluded to manipulate the difference between the ask price and the bid price (spread) of derivatives based on these reference rates to the detriment of their clients.''
The Swiss competition watchdog suspects that collusion between derivative traders might have influenced Libor and TIBOR. The competition commission confirmed that the probe was linked to similar investigations launched in the UK, the US and Japan.
UBS had last year disclosed it was under a probe for allegedly helping manipulate the calculation of LIBOR. The bank, in its second-quarter report, noted that it had been granted conditional leniency or immunity in certain jurisdictions, without going into specific details. Last year, it had also got partial immunity in the US for cooperating with the investigators.