Singapore raps banks in rate-rigging probe

SINGAPORE – Singapore on Friday, June 14, censured 20 banks, including top global lenders, over attempts to manipulate local benchmark rates — part of a widening rate-rigging scandal being investigated by financial regulators worldwide.

The Monetary Authority of Singapore (MAS) said a yearlong review found that 20 banks — including Bank of America, JP Morgan Chase and Standard Chartered — had insufficient internal controls and risk management which allowed traders to attempt manipulation.

“MAS has censured these banks and directed them to adopt measures to address their deficiencies,” the city-state’s central bank said in a statement.

It said 133 traders from these banks were found “to have engaged in several attempts to inappropriately influence the benchmarks”. Three-quarters of these traders have resigned or been fired, while the rest face disciplinary actions including loss of bonuses.

The MAS crackdown is the latest in a global campaign by financial regulators to curb malpractices in the setting of benchmark rates, which has resulted in banks such as Royal Bank of Scotland, UBS and Barclays paying fines worth millions of dollars.

Nineteen of the banks reprimanded by MAS have been directed to set aside deposits ranging from Sg$100 million to Sg$1.2 billion for one year.

Three of Singapore’s homegrown banks also did not escape censure, with Oversea-Chinese Banking being asked to set aside up to Sg$800 million while DBS and United Overseas Bank were told to put aside up to $600 million each.

“While there is no conclusive finding that… benchmarks were successfully manipulated, the traders’ conduct reflected a lack of professional ethics,” MAS said.

However, the attempted rigging did not constitute a criminal offense, it said.

“Ensuring the integrity of the processes for setting financial benchmarks is vital,” said MAS deputy managing director Teo Swee Lian.

“MAS has taken firm supervisory actions against the banks, based on a careful assessment of their respective deficiencies.” – Rappler.com