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UBS attempted to rig Hong Kong interest rate, probe finds

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Swiss banking giant UBS attempted to rig Hong Kong's benchmark interest rate, the city's de facto central bank said on Friday following a more than year-long investigation.

The Hong Kong Monetary Authority (HKMA) began its probe into the local interbank rate, or Hibor, in December 2012 after it received information from overseas regulators about "possible misconduct" by UBS.

It later expanded its probe to include nine banks including HSBC Holdings and Royal Bank of Scotland but found that only UBS attempted to rig rates.

"The HKMA found about 100 communication records during 2006 to 2009, in the form of internal chat messages, which contained change requests by several UBS traders to the UBS Hibor submitter with a view to rigging the Hibor," it said in a statement released Friday.

The regulator has demanded that UBS take disciplinary actions against staff members who were involved in the act or failed to report it and that the bank implement a "remedial plan" within six months.

The investigation covered more than 31 million communication records between 2005 and 2012 from nine banks and the HKMA believed the attempted rigging did not have any impact on the Hibor.

In December 2012 UBS was ordered to pay $1.5 billion in fines to national regulators in three countries to settle accusations that it tried to manipulate interest rates.

Probes by Swiss, British and US regulators revealed evidence of massive misconduct in the setting of the London interbank offered rate (Libor), a global reference that affects products from student loans to mortgages.

The Libor scandal threatened over a dozen other banks, with British bank Barclays agreeing in June of 2012 to pay £290 million ($471 million) to British and US regulators to settle charges related to manipulation of rates.

-- Dow Jones Newswires contributed to this report --

Swiss banking giant UBS attempted to rig Hong Kong’s benchmark interest rate, the city’s de facto central bank said on Friday following a more than year-long investigation.

The Hong Kong Monetary Authority (HKMA) began its probe into the local interbank rate, or Hibor, in December 2012 after it received information from overseas regulators about “possible misconduct” by UBS.

It later expanded its probe to include nine banks including HSBC Holdings and Royal Bank of Scotland but found that only UBS attempted to rig rates.

“The HKMA found about 100 communication records during 2006 to 2009, in the form of internal chat messages, which contained change requests by several UBS traders to the UBS Hibor submitter with a view to rigging the Hibor,” it said in a statement released Friday.

The regulator has demanded that UBS take disciplinary actions against staff members who were involved in the act or failed to report it and that the bank implement a “remedial plan” within six months.

The investigation covered more than 31 million communication records between 2005 and 2012 from nine banks and the HKMA believed the attempted rigging did not have any impact on the Hibor.

In December 2012 UBS was ordered to pay $1.5 billion in fines to national regulators in three countries to settle accusations that it tried to manipulate interest rates.

Probes by Swiss, British and US regulators revealed evidence of massive misconduct in the setting of the London interbank offered rate (Libor), a global reference that affects products from student loans to mortgages.

The Libor scandal threatened over a dozen other banks, with British bank Barclays agreeing in June of 2012 to pay £290 million ($471 million) to British and US regulators to settle charges related to manipulation of rates.

— Dow Jones Newswires contributed to this report —

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