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ANZ settles interest rate rigging case just before trial begins

Photo: ASIC alleged ANZ had rigged the bank bill swap rate. (AAP Image: Sergio Dionisio) Photo: ASIC alleged ANZ had rigged the bank bill swap rate. (AAP Image: Sergio Dionisio)

ANZ has reached a last-minute settlement with the corporate watchdog ASIC, just as the Federal Court trial was about to begin this morning.

ASIC alleged ANZ, along with Westpac and NAB, had engaged in market manipulation and unconscionable conduct by rigging the bank bill swap reference rate (BBSW).

In particular, ANZ was accused of breaking the law on 44 occasions, from 2010 to 2012, and influencing the setting of the BBSW to "maximise its profit".

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.

The maximum penalty for companies which breach the Corporations Act is $1 million per contravention.

ASIC is seeking financial penalties and a court declaration that the banks broke the law and engaged in unconscionable conduct.

The corporate regulator also wants the court to order that ANZ staff, involved in trading in the bank bill market, undergo a comprehensive compliance program.

ANZ's and ASIC's settlement is an "in-principle" agreement at this stage, and the parties are currently negotiating final details.

The settlement sum that ANZ needs to pay is reportedly $50 million.

The ABC has contacted both ANZ and ASIC for comment, but neither would confirm the settlement amount — or whether the bank will admit wrongdoing as part of the deal.

In the meantime, the Federal Court has stood down the hearing until Wednesday morning.

If the case against NAB and Westpac proceeds, it will be heard by the court over six weeks, an ASIC spokesperson said.

The cost of this settlement will impact ANZ's full year results (for the 2016-17 financial year), which will be released on Thursday, October 26.

ANZ's shares have risen 0.36 per cent to $30.70 at 1:05pm (AEDT).

This article was first published by
 Author: David Chau
Last modified onWednesday, 25 October 2017 01:35

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