SYDNEY Jan 28 French bank BNP Paribas SA
has been censured by Australian regulators after
revealing its traders tried to influence the setting of the
country's benchmark inter-bank interest rate, the latest in a
string of scandals over global rates setting.
BNP will make a A$1 million ($874,800) donation toward
promoting financial literacy after an internal investigation
found communications showing derivatives traders in Singapore
and BNP's Sydney treasury desk discussed preferred settings for
the Bank Bill Swap Reference Rate (BBSW), the Australian
Securities and Investment Commission (ASIC) said on Tuesday.
The review concluded the maximum possible benefit for BNP
was A$760,000 during the period under review from 2007 to 2010
and an "insignificant" impact on the market as a whole.
"We've self-reported this facts to ASIC. BNP Paribas made no
admission of wrongdoing in relation to the matters, but we
acknowledge ASIC's concern for the potential problems," a
spokeswoman for BNP said.
"So we've agreed to enter a five-year enforceable
undertaking with ASIC to ensure participation in relation to the
setting of Australia interest rate benchmarks."
Global regulators have been reforming rate-setting practices
after Barclays Plc, UBS AG, Royal Bank of
Scotland Group Plc and others were hit with fines
totalling billions of dollars for rigging the London Interbank
Offered Rate, known as Libor. Libor and other similar inter-bank
rates are used to price home loans, credit cards and other
financial products worth trillions of dollars.
Last year, Australia scrapped its BBSW rate-setting
mechanism after an exodus of banks from the panel, the first
major market to dismantle the tarnished structure.
Other similar censures by ASIC, known as enforceable
undertakings, are likely. UBS has previously said it was
investigating potential "misconduct" in submissions for BBSW.
ASIC officials declined to comment on other investigations