Singapore’s monetary authority censured banks for trying to rig benchmark interest rates and ordered them to set aside as much as S$12 billion ($9.6 billion) at zero interest pending steps to improve internal controls.
ING Groep NV, Royal Bank of Scotland Group Plc and UBS AG were among 20 banks at which 133 traders tried to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks in the city-state, the Monetary Authority of Singapore said in a statement today after reviewing the period from 2007 to 2011. The regulator will make rigging key rates a criminal offense and bring supervision under its oversight.
The crackdown in Singapore comes amid a widening global review of benchmarks. Bloomberg News reported this week traders manipulated key foreign-exchange rates in the $4.7 trillion-a- day currency market. Barclays Plc, UBS and RBS have been fined about $2.5 billion in the past year for rigging the London interbank offered rate and U.S. regulators are also probing the ISDAfix rate, a measure used in the swaps market.
“Regulators around the world are taking this opportunity to identify where there may be weaknesses in mechanisms banks have in place,” David Marshall, a Singapore-based analyst at CreditSights Inc., said by telephone today. “They’ve been keen to put in place a clearer and stricter regulatory environment in which to operate.”
Nineteen firms were asked to post reserves ranging from S$100 million to S$1.2 billion -- depending on the severity of the attempts by their traders to manipulate rates -- for a year and will earn zero interest on that money, MAS said. Commerzbank AG was exempted from setting aside any money.
The banks have taken disciplinary action against the 133 traders found to have tried to rig the rates, with about three- quarters of them having resigned or been asked to leave their firms, MAS said. The traders who are still employed will be subject to disciplinary action, the regulator said.
During the yearlong review, the central bank’s officials went through more than 100 million documents, according to MAS. The regulator didn’t identify the individuals involved, make specific allegations against firms, or produce evidence supporting its findings.
“While there was no conclusive finding the SIBOR, SOR and FX benchmarks were successfully manipulated, the traders’ conduct reflected a lack of professional ethics,” according to the statement from the central bank.