Macquarie, ANZ to Pay $11 Million Over Malaysia Rates Probe

After admitting to attempted cartel conduct relating to the setting of a benchmark Malaysian rate in 2011, Macquarie Bank Ltd. and Australia & New Zealand Banking Group Ltd. agreed to pay a combined A$15 million ($11 million) in penalties.

Melbourne-based ANZ had admitted to 10 instances of alleged cartel conduct and Sydney-based Macquarie to eight, said that the Australian Competition and Consumer Commission said in a statement on Friday. The ACCC said that they offered to pay A$9 million and A$6 million in penalties respectively.

The regulator said that daily submissions on the Malaysian ringgit fixing rate to be made to the Association of Banks in Singapore were done by Singapore-based traders for the two banks and others communicating via private online chat rooms is the basis of the case. 20 banks — including ANZ and Macquarie –were censured in 2013 for trying to rig benchmark interest rates, by the Monetary Authority of Singapore and the settlement stems from this wider probe.

“These proceedings are a reminder that Australian cartel laws apply to financial markets, and capture cartel conduct by firms that carry on business in Australia, regardless of where that conduct occurred,” ACCC Chairman Rod Sims said in the statement.

Lenders across the globe have paid billions of dollars in fines and an overhaul of how such rates are set have been made following probes into the rigging of foreign-exchange markets and interest-rate benchmarks.

Civil legal action against three of the big four banks over alleged manipulation of the Australian swap rate — the local equivalent of Libor, is being taken by the Australian Securities & Investments Commission ay present. The cases are being contested by ANZ, National Australia Bank Ltd. and Westpac Banking Corp.

The MAS ordered the banks it censured three years ago to set aside as much as S$12 billion ($8.4 billion), pending steps to improve internal controls and swap offered rates and currency benchmarks for trying to manipulate the Singapore interbank offered rate. The conduct of traders “reflected a lack of professional ethics,” said the central bank at the time and it had also said that it found no “conclusive” evidence that rates were successfully manipulated.

Saying that the banks had taken steps to prevent a recurrence of attempts to rig rates, the MAS returned the money within 18 months. The MAS said in 2013 that about three-quarters of the 133 traders involved, had resigned or been asked to leave their firms.

According to a statement from the lender, benchmark rates used to settle non-deliverable forward contracts for the Malaysian ringgit had been attempted to be influenced by three Singapore-based employees unsuccessfully in 2011 and ANZ’s Australian penalty stemmed from this. AMZ said that the three are no longer employed by ANZ.

“We accept responsibility and apologize for the actions of our former employees. We have made significant improvements to our compliance, training and monitoring systems to ensure this does not happen again,” ANZ Chief Risk Officer Nigel Williams said in the statement.

(Adapted from Bloomberg)


Categories: Economy & Finance

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