Monday 18 November 2019

Swiss bank USB to be hit with $1bn fine over Libor scandal

Huw Jones

SWISS bank UBS faces a combined fine of around $1 billion next week to settle charges of rigging the Libor interest rate benchmark, according to a source.

"The global settlement is about $1 billion. It's expected early next week, on Monday or Tuesday," the source said.

UBS declined to comment as did Britain's Financial Services Authority.

Such a penalty would be more than double the $450 million penalty imposed in June on British bank Barclays by U.S. and UK regulators.

Barclays was the first - and so far only - bank to settle charges of rigging the London interbank offered rate, which is known as Libor.

The fallout forced its chairman and chief executive to quit and prompted a political and public backlash against standards in banking across Europe and the United States.

Libor is used to price financial products worth more than $300 trillion worldwide and regulators across the world are probing around a dozen banks for seeking to manipulate it.

The fine will mark another blow to UBS, which has had a tough 18 months after being rocked by a $2.3 billion rogue trading scandal, management upheaval and thousands of job cuts.

Banks have been keen to put such fines behind them as they attempt to rebuild credibility among politicians, the general public and investors following the financial crisis.

On Tuesday, Europe's HSBC Holding Plc reached a $1.92 billion settlement with US authorities over lax money-laundering controls.

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