Two big Aussie banks fined over ringgit fix

Macquarie Bank and ANZ have agreed to pay a combined A$15 million (S$16 million) in penalties after admitting to attempted cartel conduct relating to the setting of a benchmark Malaysian rate in 2011.
Macquarie Bank and ANZ have agreed to pay a combined A$15 million (S$16 million) in penalties after admitting to attempted cartel conduct relating to the setting of a benchmark Malaysian rate in 2011.PHOTO: REUTERS

ANZ, Macquarie admit Singapore-based employees tried to manipulate benchmark rate for Malaysian unit in 2011

SYDNEY • Two of Australia's largest banks, ANZ and Macquarie, yesterday admitted that several employees in Singapore had tried to manipulate the benchmark rate for the Malaysian currency in 2011.

The case stems from a wider probe by the Monetary Authority of Singapore (MAS), which censured 20 banks - including ANZ and Macquarie - in 2013 for trying to rig benchmark interest rates.

Macquarie Bank and Australia & New Zealand Banking (ANZ) agreed to pay a combined A$15 million (S$16 million) in penalties after admitting to attempted cartel conduct relating to the setting of a benchmark Malaysian rate in 2011.

The Australian Competition and Consumer Commission (ACCC) said in a statement yesterday that ANZ had admitted to 10 instances of alleged cartel conduct and Macquarie to eight. They offered to pay A$9 million and A$6 million in penalties respectively, the ACCC said.

The case involved Singapore- based traders for the two banks and others communicating via private online chat rooms about the daily submissions on the ringgit fixing rate to be made to the Association of Banks in Singapore.

"These proceedings are a reminder that Australian cartel laws apply to financial markets, and capture cartel conduct by firms that carry on business in Australia, regardless of where that conduct occurred," ACCC chairman Rod Sims said.

NO TO CARTELS

These proceedings are a reminder that Australian cartel laws apply to financial markets, and capture cartel conduct by firms that carry on business in Australia, regardless of where that conduct occurred.

ACCC CHAIRMAN ROD SIMS

Probes into the rigging of foreign exchange markets and interest rate benchmarks have led to lenders across the globe paying billions of dollars in fines and an overhaul of how such rates are set.

In addition, the Australian Securities & Investments Commission is taking civil legal action against three of the big four banks over alleged manipulation of the Australian swap rate - the local equivalent of Libor. ANZ, National Australia Bank and Westpac Banking are all contesting the cases.

For trying to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks, the MAS ordered the banks it censured three years ago to set aside as much as S$12 billion, pending steps to improve internal controls. MAS returned the money within 18 months, saying  the banks had taken steps to prevent a recurrence of attempts to rig rates. Of the 133 traders involved, about three-quarters had resigned or been asked to leave their firms, MAS said in 2013.

ANZ's Australian penalty stemmed from three Singapore- based employees' unsuccessful attempts in 2011 to influence benchmark rates used to settle non-deliverable forward contracts for the Malaysian ringgit. The three are no longer employed by ANZ, it said.

Macquarie's settlement was linked to the actions of a former employee in Singapore five years ago, the firm said in a separate statement. No senior management or any other staff members were aware of the conduct of the junior employee, who was fired in 2012, the bank said.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 26, 2016, with the headline 'Two big Aussie banks fined over ringgit fix'. Print Edition | Subscribe