First Bank Suit in Aussie Rates Probe Risks Hobbling Benchmark
- Securities regulator is suing ANZ over alleged manipulation
- Bank bill swap rate being reformed as trading volumes plunge
The Australia & New Zealand Banking Group Ltd. headquarters stands on the bank of the Yarra River at night in Melbourne, Australia, on Friday, May 1, 2015.
Photographer: Carla Gottgens/BloombergAustralia’s securities regulator, suing one of the nation’s biggest banks over alleged interest-rate manipulation, risks further deterring the very institutions that are essential to setting the bank bill swap rate, the local equivalent of Libor.
The Australian Securities & Investments Commission said Friday it was taking legal action against Australia & New Zealand Banking Group Ltd. over alleged conduct relating to the rate also known as BBSW that’s used as a benchmark for trillions of dollars in financing. The regulator has been investigating the process for more than three years and in that time participation in the transactions used to determine the rate has dwindled to such a point that Reserve Bank of Australia Assistant Governor Guy Debelle has said reform is needed to maintain its robustness.