| ZURICH/LONDON June 12
ZURICH/LONDON June 12 UBS shares fell on
Thursday following a research report which said the Swiss bank
could have to pay $8 billion in fines and settlements relating
to alleged collusion and price-manipulation in the global
The report, published on Wednesday by independent research
firm Autonomous Research, said foreign exchange settlements
could cost banks a total of $35 billion, almost six times more
than the total fines paid in the Libor interest rate-rigging
Shares in UBS, which declined to comment on the
figure in the report, were down 1.9 percent at 1200 GMT, a move
traders in Zurich attributed to the Autonomous report.
The report estimates that UBS will pay $8 billion, the
biggest fine for any single bank and more than the $6 billion
total all banks have so far shelled out for Libor.
Next are the world's two largest foreign exchange trading
banks: Deutsche Bank AG with an expected $4.4 billion
fine, and Citigroup with $4.3 billion.
Autonomous, a research firm founded in 2009 covering major
European and U.S. banks, based its estimates on the size of
Libor fines, including those avoided for co-operation. It
reckons the total FX fine pool will be at least double the Libor
total, but capped at each bank's annual profit level.
"We acknowledge that our methodology is speculative, but it
applies the theory that repeated wrongdoing attracts higher
penalties, as witnessed elsewhere," the authors said in the
Autonomous is an independent research firm covering major
U.S. and European banks. It was founded in 2009 by Stuart
Graham, formerly head of European banks equity research at
Merrill Lynch. The firm's chairman is Lord Myners.
UBS declined to comment on the Autonomous report, but a
spokesman pointed to the bank's first-quarter report, where it
showed 1.778 billion Swiss francs in provisions to cover all its
legal difficulties. Its quarterly report in May showed that
overall operational and legal risks could hit the bank's capital
base by 3.1 billion francs in the coming 12 months.
Deutsche declined to comment, and Citi was unavailable for
Regulators around the world, including the U.S. Department
of Justice and Britain's Financial Conduct Authority, are
investigating allegations that senior currency traders shared
client order information with each other and attempted to
manipulate exchange rates.
Some 40 FX employees at many of the world's biggest banks
have been placed on leave, suspended or fired as part of the
global investigation - including one employee at the Bank of
England - although no individual or institution has been accused
of any wrongdoing.
(Additional reporting by Ruppert Pretterklieber; Editing by