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On Tuesday (24 October), ASIC announced that it had reached a confidential in-principle settlement with ANZ resolving the dispute over its alleged bank bill swap rate (BBSW) misconduct.
Commenting on the matter, RateSetter chief executive Daniel Foggo said that the corporate regulator’s activity in this area of the market bodes well for a more transparent financial system.
“The BBSW rigging scandal is serious and ASIC is right to pursue the banks in the interest of all Australians,” the CEO said. “Let’s not forget that the manipulation of BBSW and LIBOR has arguably cost home owners and other borrowers billions of dollars. We commend our regulator for standing up to these powerful incumbents.”
However, the fintech executive said that the misconduct penalty in ANZ’s case does not fit the crime.
“The fine agreed with ANZ just doesn’t measure up,” Mr Foggo said. “Compared to the billions of dollars in profit [that] the bank makes every year, and the billions in fines handed out to UK banks for similar misconduct, the $50 million penalty is just a light slap on the wrist.”
Mr Foggo added that Australia’s “inherently conflicted” bank model will likely produce more problems for consumers in the future.
[Related: ANZ watching mortgage book ‘like a hawk’]