HONG KONG/SINGAPORE Dec 20 Hong Kong's de facto
central bank said it is investigating possible misconduct by UBS
over its submission of interbank rates, raising the
possibility that the bank could face more fines a day after it
agreed to pay $1.5 billion for its role in the Libor scandal.
The Hong Kong Monetary Authority (HKMA) said in a statement
on Thursday that it had received information from overseas
regulatory authorities about possible misconduct by UBS
involving submissions for the Hong Kong Interbank Offered Rate
(Hibor) and other reference rates in the region.
On Wednesday, the Swiss bank admitted to fraud and bribery
in connection with efforts to rig Libor and other benchmark
interest rates and agreed to pay $1.5 billion in fines to
regulators in the United States, Britain and Switzerland.
While the bank will hope that settlement will draw a line
under its role in Libor manipulation, it remains at risk of
action from regulators elsewhere for possible rate rigging.
Besides Hong Kong, an investigation is still ongoing in
Singapore into possible manipulation of benchmark interest and
foreign exchange rates.
A spokesman for the Monetary Authority of Singapore (MAS)
said on Thursday that banks on rate-setting panels in the
city-state, including UBS, are still conducting reviews into
their rate-setting processes.
"The reviews are ongoing, and it is premature to speculate
on the outcome of these reviews at this stage," the spokesman
said in an emailed statement.
In October, UBS disclosed in its third quarter earnings
report that it was also involved in a probe into possible
manipulation of benchmark rates in Singapore.
"We continue to work closely with various regulatory
authorities to resolve issues relating to the setting of certain
global benchmark interest rates. As we are currently in active
discussions with these authorities, we cannot comment further,"
said a spokesman for UBS in Hong Kong.
The MAS ordered members of the Association of Banks in
Singapore in July to review how they set their benchmark
interbank lending rates, focusing on the Singapore interbank
offer rate (Sibor) and the Swap Offer Rate (SOR).
That probe was extended in late September when the regulator
said banks must also look at how rates for non-deliverable
foreign exchange forwards are set.
Banks have been told to immediately report any
irregularities they uncover to MAS.
Late last month the Hong Kong Association of Banks said it
was considering a series of reforms to the Hibor system,
including bringing in a formal code of conduct and reducing the
number of rates it publishes.