Banks have been slow in providing information on possible manipulation of Australia’s interest-rate benchmark, the country’s regulator said.
The banks’ cooperation “is improving but it’s still not good enough,” Australian Securities & Investments Commission Chairman Greg Medcraft said Wednesday in a media briefing. “We are often finding a very defensive approach taken” by banks, which “tends to trigger suspicion even more.”
The regulator has been investigating the setting of Australia’s bank-bill swap rate or BBSW -- the local equivalent of Libor -- since mid 2012 but is yet to draw any conclusions. Other regulators’ probes into the rigging of foreign-exchange markets and interest-rate benchmarks has led to lenders across the globe paying billions of dollars in fines.
The Australian Financial Markets Association shut the 14-bank, rate-setting panel last year and moved to a mechanism where the benchmark is compiled directly using prices from brokers and electronic markets.
At least A$350 billion of Australian syndicated loans and floating-rate bonds are priced off BBSW, according to data compiled by Bloomberg in 2013.
So far, the investigation has led to the suspension of traders at Australia & New Zealand Banking Group Ltd. in November and voluntary contributions of a combined A$3.6 million ($2.7 million) toward financial literacy projects from Royal Bank of Scotland Group Plc, UBS Group AG and BNP Paribas SA.