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ANZ to pay $50m over ‘unconscionable conduct’

The Federal Court of Australia has approved a settlement between ANZ and ASIC that will require the major bank to pay a total of $50 million in charges.

Amid ASIC’s investigation into alleged rate rigging by some lending institutions, ANZ has admitted fault following “ unconscionable conduct” by the lender in the Australian interbank bank bill swap (BBSW) market.

In a statement, ANZ apologised for an attempt by some of its traders to manipulate the bank bill swap market.

“We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour,” ANZ chief risk officer Nigel Williams said.

Required to pay an amount totalling $50 million in settlement charges, ANZ has agreed to pay $20 million to cover ASIC’s costs, another $20 million to a Financial Consumer Protection Fund and a $10 million penalty.

The bank acknowledged its failure to prevent such “unconscionable conduct” which occurred on 10 dates between September 2010 and February 2012.

“ANZ also did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders,” its statement read.

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As part of the resolution, ANZ also agreed to an “enforceable undertaking” with ASIC, whereby an “independent expert will be appointed to review controls, policies, training and monitoring of BBSW trading.”

The bank also claimed to have introduced “extensive training” for its traders in 2015, which has “significantly changed the way it manages its market business”.

No allegation of collusion between ANZ and other institutions has been made.

The financial impact of the settlement was noted in ANZ’s 2017 financial year report.

[Related: ANZ rate-rigging fine ‘doesn't measure up’]

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