Australian banks ANZ and NAB will pay a collective 100 million dollar penalty for their involvement in the rigging of overnight bank bill swap rates.
After an settlement was ratified by the Federal Court The banks had agreed to head off what could have been a long-running, more expensive and image damaging case after settling the action brought by the Australian Securities and Investments Commission (ASIC).
ASIC had alleged ANZ and National Australia Bank (NAB) were among 17 local and international banks including another Australian bank, Westpac, that engaged in market manipulation by rigging the bank bill swap reference rate (BBSW). Westpac has decided to go it alone and contest the charges.
The BBSW is one of the most important interest rates in the economy, and it provides a benchmark for setting personal and commercial loan rates. It can therefore affect business loans, mortgages and credit cards. Even small differences in the rate that is set can equal several millions of dollars in profits or losses for banks.
NAB was accused of 50 breaches, and ANZ 44 breaches, over attempts to influence the BBSW between 2010 and 2012. Each breach carried a maximum penalty of $1.2 million.
