* Regulator calls to strengthen monitoring of rate setting
* Six banks set interbank lending rate in Norwegian crowns
* Investigation triggered by complain from foreign banks
OSLO, April 8 Norway's banking regulator called
on Monday for tighter regulation for setting benchmark Nibor
interbank lending rates but said it has found no evidence that
the rates have been manipulated.
Norway's central bank has said some foreign banks have
complained about suspected manipulation of Nibor, the Norwegian
Interbank Offered Rate, which many bonds are linked to. It has
refused to disclose the names of the lenders.
Some of the world's biggest banks are embroiled in
compensation claims totalling billions of dollars following a
rate-rigging scandal over the UK equivalent London Interbank
Offered Rate (Libor), a benchmark at the heart of more than $550
trillion in financial products.
"The Financial Supervisory Authority has found no evidence
that the Norwegian reference rate - Nibor - was manipulated, or
of attempted manipulation, but neither can it confirm that this
was not the case," it said in a statement.
Nevertheless, the authority said Nibor setting should be
strengthened and made more robust against possible manipulation,
while bank quotes must be open for scrutiny and control.
"A robust system will help to strengthen confidence in
Nibor," it added. The authority plans to inspect all banks that
participate in Nibor setting in May.
Nibor is set between six commercial banks, DNB,
Danske Bank, Handelsbanken, SEB
, Swedbank and Nordea.
The finance ministry said in a separate statement it planned
to review the need for measures to strengthen the framework of
setting benchmark rates in Norway, and to come with the
conclusion by the summer.
Norway's central bank, Norges Bank, said although Nibor was
a NOK rate, it nonetheless is calculated as a dollar rate
swapped into a NOK rate in the forward exchange market.
Because of the mechanical connection, Nibor volatility is
higher than for benchmark rates in other countries, and is more
open to suspicion of manipulation, the bank added.
Although the central bank has no role in Nibor calculation
or its supervision, it called to clarify rules in rate setting
to avoid conflict of interest at the banks contributing to
"Norges Bank... emphasises that confidence in Nibor
submissions may be critically dependent on the knowledge that
individuals setting a bank's submission cannot at the same time
serve their own interests," the central bank added.
(Reporting by Nerijus Adomaitis; Editing by John Stonestreet)