Singapore’s central bank gave back as much as S$12 billion ($9.3 billion) that it took from 19 lenders last year as a penalty for trying to manipulate benchmark interest rates.
The banks have taken steps to prevent a recurrence of attempts to rig rates, the Monetary Authority of Singapore said in an e-mailed statement today.
UBS AG (UBSN ▼ -0.30% 16.55), Royal Bank of Scotland Group Plc and ING Group NV were among firms asked to post reserves ranging from S$100 million to S$1.2 billion for a year at zero interest in June 2013.
“It sends a strong message about Singapore’s determination to maintain the cleanest financial environment it can manage,” said Lachlan Colquhoun, head of markets analysis at research firm East & Partners in Sydney.
“That said, the timing is now right and the point has been made, so it is a good gesture now to return the funds, particularly at a time when banks will need to shore up capital.”
The return of the funds follows investigations in Singapore that started last year amid a widening global review of benchmark rates. Barclays Plc, UBS and RBS have paid billions of dollars to settle claims with U.S. and U.K. financial regulators of rigging the London interbank offered rate. MAS has said it will make rigging key rates a criminal offense and bring supervision under its direct oversight.
The monetary authority censured 20 banks whose traders tried to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks in the city-state. Commerzbank AG (CBK ▼ 0.00% 12.17) was exempted from setting aside cash.
Trader Resignations
The banks took disciplinary action against 133 traders found to have tried to rig the rates, with about three-quarters of them having resigned or been asked to leave their firms, MAS said last year. The traders who are still employed will be subject to disciplinary action, it said.
During the review of benchmarks set from 2007 to 2011, the central bank’s officials went through more than 100 million documents, according to MAS.
Bank of America Corp., BNP Paribas SA (BNP ▼ -0.79% 49.23), Oversea-Chinese Banking Corp., Barclays, Credit Agricole SA, Credit Suisse Group AG (CSGN ▲ 0.72% 25.18), DBS Group Holdings Ltd. (DBS ▲ 0.83% 19.35), Deutsche Bank AG (DBK ▼ -0.55% 24.57), Standard Chartered Plc (STAN ▲ 0.19% 961.80), United Overseas Bank Ltd., Australia & New Zealand Banking Group Ltd. (ANZ ▼ -2.14% 32.88), Citigroup Inc. (C ▼ -0.06% 53.99), JPMorgan Chase & Co. (JPM ▲ 0.13% 61.23), Macquarie Group Ltd. (MQG ▲ 0.58% 62.36), HSBC Holdings Plc (HSBA ▲ 0.11% 636.40) and Mitsubishi UFJ Financial Group Inc. (8306 ▲ 0.77% 628.50)’s Bank of Tokyo-Mitsubishi UFJ Ltd. unit were among the banks named by MAS in the statement last year.
“These banks have completed the remedial actions to strengthen the governance, internal controls and surveillance systems for their benchmark submissions and trading operations,” the monetary authority said today.
The Financial Times reported earlier that the money was returned. It was the first time in at least five years that a regulator had refunded a penalty to any bank, according to Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd.
“The fact that they’ve refunded the penalties implies that there wasn’t a case,” Antos said by phone today.
Scrutiny by authorities around the world has expanded beyond interest rates. Regulators are investigating whether foreign-exchange traders shared data about client orders with people at other firms to manipulate the $5.3 trillion-a-day currency market.
Singapore’s DBS, Southeast Asia’s largest lender, said in January that it had restricted access to chat rooms, while its rival UOB tightened guidelines on electronic communications.
By Tanya Angerer and Narayanan Somasundara: Bloomberg
To contact the reporters on this story: Tanya Angerer in Singapore at tangerer@bloomberg.net; Narayanan Somasundaram in Sydney at nsomasundara@bloomberg.net
To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net Darren Boey, Paul Panckhurst
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