Swiss probe into precious metals price fixing

Switzerland's competition watchdog is looking at whether Julius Baer, UBS, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads in the precious metals, including gold, silver, platinum and palladium. The major ban
Switzerland's competition watchdog is looking at whether Julius Baer, UBS, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads in the precious metals, including gold, silver, platinum and palladium. The major banks face financial penalties if found guilty.PHOTOS: REUTERS
Switzerland's competition watchdog is looking at whether Julius Baer, UBS, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads in the precious metals, including gold, silver, platinum and palladium. The major ban
Switzerland's competition watchdog is looking at whether Julius Baer, UBS, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads in the precious metals, including gold, silver, platinum and palladium. The major banks face financial penalties if found guilty.PHOTOS: REUTERS

Several major banks being investigated by watchdog for possible collusion

ZURICH • The Swiss competition regulator has opened an investigation into possible collusion in the precious metals market by several major banks, it said yesterday, the latest in a string of manipulation probes.

Switzerland's Weko watchdog said its investigation - the result of a preliminary probe - was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

The Swiss regulator said it has "indications" the banks may have colluded on pricing between the banks to coordinate prices, namely the bid/ask spreads in the precious metals, including gold, silver, platinum and palladium.

"It (Weko) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," Weko said in a statement. The regulator said in February that it had opened a preliminary probe into the possibility of price fixing in the precious metals market.

In August, European Union antitrust regulators disclosed that they are investigating precious-metals trading following a US probe that embroiled some of the same banks. The EU watchdog said it is examining possible anti-competitive behaviour in spot trading.

A Weko spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules.

The banks face financial penalties if Weko finds them guilty of wrongdoing, the spokesman said. He declined to comment on the size of any possible penalty from the probe.

The Weko investigation is the latest in a long line of probes into manipulation of the precious metals and foreign exchange markets.

Last year, Switzerland's financial regulator Finma said it had found a "clear attempt" to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS. As part of ongoing obligations imposed by Finma, UBS is seeking to automate at least 95 per cent of its global foreign exchange and precious metals trading by the end of next year.

In May, four major banks pleaded guilty to trying to manipulate foreign exchange rates and, with two others, were fined nearly US$6 billion (S$8.5 billion) in another settlement in a global investigation into the US$5 trillion-a-day market.

Spokesmen for Barclays, HSBC and UBS declined to comment. A spokesman for Julius Baer said the bank is cooperating with the probe. In a statement, Deutsche Bank said it was cooperating with requests for information from "certain regulatory authorities"over precious metal benchmarks but declined to comment further.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 29, 2015, with the headline 'Swiss probe into precious metals price fixing'. Print Edition | Subscribe