Swiss bank UBS said Wednesday it will pay a $1.5 billion fraud fine for orchestrating the manipulation of benchmark interest rates in the U.S., Europe, and Asia. Last week, British bank HSBC agreed to pay $1.92 billion -- the largest bank fine ever -- to settle a U.S. investigation into the bank’s alleged money laundering with drug cartels. But still, UBS’s stiff penalty is more than three times the $450 million fine levied on British bank Barclays in June, which had also admitted to rigging the LIBOR rate, which is used to price worldwide loans. It hasn’t been a good couple of years for UBS, which also lost $2.3 billion in a rogue trading scandal earlier this year.
Dozens of UBS staff rigged the Libor rate, which is used to price trillions of dollars worth of loans, in collusion with brokers and traders at other banks, according to an investigation by authorities in multiple countries.
The controversy is expected to ensnare other big lenders and spark criminal and civil lawsuits against individuals involved. The penalty UBS agreed with U.S., UK and Swiss authorities far exceeds the $450 million levied on Britain's Barclays in June, also for rigging Libor, and the second largest ever imposed on a bank.
"This is an endemic banking industry problem and shows how far the industry has fallen, failing itself and its customers," said Neil Dwane, chief investment officer for Allianz Global Investors.
"For the future it shows that without strong regulation and strong and new management throughout most of the biggest banks, there can be no reasonable expectation that they will improve their behavior substantially - at least UBS now has strong new management."
Unfortunately, it still seems that strong regulation of the banks ranks right up there with jail time for criminal bankers.
More like this
- One Last 2014 Ask From Blue America
- Pushing Back Against Sheldon Adelson Flood Of Slime
- Why We "Are Voting For the Other" ...Susan Collins Hasn't Earned 6 More Years
- Steve Israel's Ignored WA-08, so Jason Richie Will Use Own Strategy to Beat Loathsome Dave Reichert
- Alan Grayson-- Progressives' Cosmic Thing