Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

Big banks under investigation for rate rigging

Labor Senator Sam Dastyari says ASIC’s findings from an investigation into the rigging of the bank bill swap rate (BBSW) will be “explosive” for Australia’s major lenders.

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".

Advertisement
Advertisement

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.

Big banks under investigation for rate rigging
mortgagebusiness

Latest News

The digital property advertising business has bumped up its annual net profit by 25 per cent, in part due to “record settlements” follow...

The government has commenced a review of the financial services regulator’s funding model. ...

The bank has released its June quarter results, reporting a lending and deposit boost in the wake of its deal with the lender. ...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.