UBS Faces Probe for Possible Misconduct on Hong Kong Rate
UBS AG, which will pay $1.5 billion to settle charges with U.S. and U.K. regulators for manipulating Libor, is under scrutiny in Hong Kong for possible misconduct linked to the benchmark rate set in the city.
The Hong Kong Monetary Authority has started an investigation to see if there was wrongdoing by the Swiss bank in its submission of data for setting the Hong Kong Interbank Offered Rate, according to a statement from the de-facto central bank today. The HKMA is also reviewing whether the potential misconduct may have had a material impact on the rate.
Overseas regulators alerted the HKMA about potential manipulation of the local interbank lending rates and other reference rates in the region, it said. The move signals that the world’s biggest banks, some of which have already been penalized in Japan, may now be probed in more Asian nations even as they seek to placate U.S. and U.K. authorities.
“The whole episode is a wake-up call to regulators globally that markets are moving faster than regulators,” Sandy Mehta, chief executive officer of Value Investment Principals Ltd. in Hong Kong, said today. “While we do not need more rules and regulations, large firms in particular need to tighten their internal controls.”