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Speaking in Sydney on Monday, Labor Senator Sam Dastyari – who is chair of the Senate Economics References Committee – said the "stuff that's about to come out" about the BBSW is "very, very big".
The BBSW is the Australian equivalent of LIBOR (the London Interbank Overnight Rate) in the UK and determines the rate at which banks are willing to make short-term loans to each other.
Deutsche Bank was fined US$2.5 billion in June by a number of US regulators after the UK Financial Conduct Authority found its employees had manipulated LIBOR and the eurozone equivalent, EURIBOR.
Senator Dastyari said ASIC now has 20 per cent of its resources focused on the behaviour of the Australian banks in "the collusion that went on regarding the BBSW".
Central to the investigation are the online chat room records of bank traders, said Mr Dastyari.
"[ASIC] has seven years of chat room records of people. Three of the four big banks are being investigated.
"If what’s in the chat rooms is what’s alleged to be in the chat rooms [it will be] explosive when they get to the bottom of it," Mr Dastyari said.
It is alleged that traders from different banks spoke about the figures they would be presenting the next day in order to trade on that information, he said.
Mr Dastyari noted that ANZ has already fired "seven or eight" employees as a result of the ongoing ASIC investigation. ANZ announced it had dismissed an employee for "inappropriate electronic communication" on 31 July 2015.
"The other banks have all conducted internal investigations. That’s going to be very big," Mr Dastyari said.