UBS faces $1.6 bln fine over Libor rigging: paper

ZURICH Sat Dec 15, 2012 6:59pm IST

Christmas lights are illuminated at an office building of Swiss bank UBS in Zurich December 4, 2012. REUTERS/Arnd Wiegmann

Christmas lights are illuminated at an office building of Swiss bank UBS in Zurich December 4, 2012.

Credit: Reuters/Arnd Wiegmann

Related Topics

Stocks

   

ZURICH (Reuters) - UBS UBSN.VX faces a fine of 1.5 billion Swiss francs to settle interest rate rigging charges, a Swiss newspaper reported on Saturday.

Citing unnamed sources, Tages-Anzeiger daily said the bank would admit 36 traders around the globe manipulated yen Libor between 2005 and 2010. A UBS spokesman declined to comment.

People familiar with the matter told Reuters on Friday UBS

could reach a $1-billion-plus settlement and admit to criminal wrongdoing by its Japanese arm, where one of its traders manipulated yen Libor and euroyen contracts.

Between 25 and 30 people have left UBS over the matter, the sources said. The Swiss bank had hoped for a softer touch from regulators by cooperating in industry-wide probes and was surprised by the size of the expected settlement, they added.

A 1.5 billion franc settlement would be the biggest ever paid by the bank, recovering from a $2.3-billion trading fraud by London-based trader Kweku Adoboli for which it was fined 30 million pounds last month.

A settlement would make UBS the second major bank to be sanctioned for its role in the Libor scandal. Britain's Barclays (BARC.L) paid a $450 million fine in June.

Libor is the rate used as a benchmark for pricing trillions of dollars worth of financial instruments and contracts around the globe. Tiny shifts in the rate, compiled from daily polls of bankers, could benefit dealers in complex products.

HEADING FOR LOSS

Tages-Anzeiger said the fine, together with restructuring charges of 500 million francs from plans to cut 10,000 staff as UBS winds down its fixed income business, would probably push the bank to a fourth-quarter loss.

UBS had already said costs related to the investment banking overhaul would lead to a fourth-quarter and full-year loss after it posted a third-quarter net loss of 2.172 billion francs. It is due to publish full-year results on February 5.

By admitting to a charge against its Japanese subsidiary, UBS would stop short of admitting wrongdoing at a group level, which could be fatal for a bank as it could lose its licence.

Chairman Axel Weber, who joined UBS this year after stepping down as head of the German central bank, has been on a whirlwind diplomatic tour over the probe, the Tages-Anzeiger reported.

Swiss newspapers noted that Mark Branson, now responsible for overseeing big banks for Swiss financial markets regulator Finma, was chief executive of UBS Japan at the time of the alleged rate rigging.

A Finma spokesman said Branson had removed himself from Finma's investigation into Libor to avoid any appearance of conflict of interest but declined to comment futher.

In 2009, UBS paid $780 million to settle a messy U.S. investigation into tax evasion by admitting it had helped wealthy Americans evade and cheat on their taxes.

(Reporting by Emma Thomasson; editing by Jason Webb)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Barack Obama in India

Reuters Showcase

Coal Mining

Coal Mining

India to open coal to commercial mining firms soon, minister says  Full Article 

RBI Loan Rules

RBI Loan Rules

RBI relaxes overseas loan recast rules   Full Article 

E-commerce Firms

E-commerce Firms

Amazon, e-commerce rivals fuel commercial property boom in India  Full Article 

Growth Forecasts

Growth Forecasts

Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll.  Full Article 

Uber is Back

Uber is Back

Uber back in Delhi; govt says must await approval.  Full Article 

Markets at Record

Markets at Record

Sensex rises to record after ECB stimulus programme.  Full Article 

Pharma Sector

Pharma Sector

Ipca Labs hit by FDA ban on plant for standard violations.  Full Article | Related Story 

Forex Reserves

Forex Reserves

India FX reserves at record high as RBI fortifies defences  Full Article 

QE for Euro Zone

QE for Euro Zone

ECB launches 1 trillion euro rescue plan to revive euro economy.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage