July 31, 2012 / 8:51 AM / 7 years ago

Swiss regulator quizzes Credit Suisse, UBS on Libor

ZURICH (Reuters) - Swiss regulator FINMA said it is questioning UBS and Credit Suisse in an investigation over possible Libor interest rate rigging.

“We are actively going after information that will enable us to make a judgment on what has happened,” a FINMA spokesman told Reuters on Monday.

The two banks are not under formal investigation as Swiss banks are legally obliged to cooperate with FINMA, which regulates the country’s banks.

Credit Suisse said on July 16 it did not expect a “material” impact from the regulatory probe.

UBS, which is already being investigated by the Swiss competition authority WEKO over its role in the Libor scandal, said in its first quarter report it has been granted conditional leniency or conditional immunity from authorities in certain jurisdictions.

These include the Antitrust Division of the U.S. Department of Justice and WEKO and relate to potential antitrust or competition law violations related to submissions for Yen LIBOR and Euroyen TIBOR.

UBS is reporting second quarter results on Tuesday at 0445 GMT.

Should FINMA conclude that the banks violated Swiss regulations, it can demand changes both at organizational and managerial level.

The spokesman also said that Swiss authorities were in close contact with investigators around the world. “We have already granted administrative assistance,” he said.

People familiar with the investigations around the world told Reuters last week that U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates.

In Europe, financial regulators are focusing on a ring of traders from several European banks who allegedly sought to rig benchmark interest rates such as Libor, said the European source familiar with the investigation in Europe.

The London Interbank Offered Rate underpins hundreds of trillions of dollars in assets.

Activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay $453 million in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009.

Reporting by Albert Schmieder, writing by Andrew Thompson. Editing by Jane Merriman and David Cowell

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