• Regulator on verge of filing civil action, AFR reports
  • ASIC has criticized banks for lack of cooperation in probe

Australia & New Zealand Banking Group Ltd. said it’s continuing to cooperate with a probe into possible manipulation of Australia’s interest-rate benchmark, amid a report the regulator is on the verge of taking legal action against the bank.

The Australian Securities and Investments Commission is expected to file a civil action against ANZ Bank in relation to breaches of the law relating to the bank-bill swap rate between 2007 and 2013, the Australian Financial Review reported Monday, without citing sources. An announcement is expected in the next few weeks, the newspaper said.

"We are continuing to cooperate with the ASIC investigation," ANZ Bank said in an e-mailed statement when asked to comment on the report. ASIC said in a statement it doesn’t comment on its investigations.

The regulator has been investigating the setting of BBSW -- the local equivalent of Libor -- since mid-2012 and Chairman Greg Medcraft has criticized a lack of cooperation from banks. The investigation led to the suspension of seven traders at ANZ Bank in November 2014 and voluntary contributions of a combined A$3.6 million ($2.5 million) toward financial literacy projects from Royal Bank of Scotland Group Plc, UBS Group AG and BNP Paribas SA.

ASIC officials, including Commissioner Cathie Armour, are expected to be asked about the investigation when they appear before a Senate committee on Thursday. Senator Sam Dastyari, who sits on the committee and has closely followed the probe, told ABC radio Monday that sources within ASIC seem “fairly confident they are on the verge of what will perhaps be the largest ever civil penalty process of its kind.”

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.

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