Singapore censures 20 banks for bids to rig benchmark rates

Discontinuing Rates

Sibor, used to price debt ranging from commercial term- loans to homeowners’ mortgages, is calculated daily on behalf of the Association of Banks in Singapore. For the local currency rate, a poll is conducted of the 11 contributing banks to ask how much it would cost to borrow Singapore dollars from each other for different periods from one month to 12 months. Some of the highest and lowest quotes are excluded, and the remaining are averaged and published at 11:30 a.m. in Singapore.

Singapore will be among the first countries to start using trading data rather than the survey of estimates in calculating benchmark rates, ABS and the Singapore Foreign Exchange Market Committee said in a separate statement. The new method will apply to four of the current 11 rates in the nation, while another four will be discontinued and two will be replaced with benchmarks from other markets, it said.

Local-currency Sibor, to which most Singapore mortgages are pegged, will continue to be based on the survey method to reflect interbank borrowing costs, according to the statement. The benchmark will be subject to regular reviews, it said. The U.S. dollar Sibor rate and Malaysian ringgit spot rates will be replaced with U.S. dollar-Libor and onshore ringgit spot rates.

Full Cooperation

The Singapore Foreign Exchange Market Committee, which aims to set industry standards and a code of conduct for currency traders, has 20 members including the Monetary Authority of Singapore and the nation’s sovereign wealth fund, as well as banks and asset management firms.

ING “fully cooperated” with the review in Singapore and has taken disciplinary actions against the “small number of individuals involved,” the Amsterdam-based bank said in a statement. The firm will also take steps to improve procedures for submitting rates, monitor the processes and train staff, it said. UBS and RBS said in statements they have co-operated closely with MAS to address issues the regulator raised.

Bank of America Corp., BNP Paribas SA, Oversea-Chinese Banking Corp., Barclays, Credit Agricole, Credit Suisse Group AG, DBS Group Holdings Ltd., Deutsche Bank AG, Standard Chartered Plc, United Overseas Bank Ltd., Australia & New Zealand Banking Group Ltd., Citigroup Inc., JPMorgan Chase & Co., Macquarie Group Ltd., HSBC Holdings Plc and Mitsubishi UFJ Financial Group Inc.’s Bank of Tokyo-Mitsubishi UFJ unit were among the banks named by MAS in the statement today.

‘Clear Signal’

Credit Suisse and Credit Agricole said they had fully co- operated with MAS and will implement its recommendations. HSBC and DBS said they supported MAS’s actions. Standard Chartered said it accepted MAS’s findings. Mitsubishi UFJ, United Overseas Bank and OCBC said they will strengthen their internal controls. Spokesmen for Macquarie, Barclays and Deutsche Bank declined to comment. A spokeswoman for BNP Paribas couldn’t immediately comment.

“The punishment meted out will provide a clear signal that manipulation and other forms of financial shenanigans, riggings and violations of the law will not be tolerated in a well- respected global financial center,” Joseph Cherian, director of the Centre of Asset Management Research & Investments at the National University of Singapore’s Business School, said by telephone today.

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