Fabrice Coffrini /AFP/Getty Images
The logo of Swiss banking giant UBS in Zurich, Switzerland.
The logo of Swiss banking giant UBS in Zurich, Switzerland. Fabrice Coffrini /AFP/Getty Images
Swiss banking giant UBS AG has agreed to pay $1.5 billion in fines to regulators in the U.S., Britain and Switzerland for its part in a scheme to manipulate the London interbank offered rate (LIBOR), which is used to set rates on contracts around the world.
The bank confirmed the news in a statement. As The Associated Press reports, UBS is "the second bank, after Britain's Barclays PLC, to settle over the rate-rigging scandal." Barclays is paying $450 million in fines.
The AP adds that:
"In accepting the fines, UBS said some of its employees tried to rig the LIBOR rate in several currencies, but that its Japan unit, where much of the manipulation took place, entered a plea to one count of wire fraud in an agreement with the U.S. Justice Department.
"UBS said some of its personnel had 'engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions' and that some employees had 'colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions.'
"UBS added that 'inappropriate directions' had been submitted that were 'in part motivated by a desire to avoid unfair and negative market and media perceptions during the financial crisis.' "
The Wall Street Journal writes that "authorities on Wednesday painted a picture of 'routine and widespread' attempts by UBS employees to rig Libor and the euro interbank offered rate, or Euribor. The U.K. Financial Services Authority said it had identified more than 2,000 such attempts between 2005 and 2010 with the participation or awareness of at least 45 UBS traders and executives. Adding to the severity of the allegations, the FSA said UBS engaged in collusive efforts with other financial institutions to rig the benchmarks."
The Journal also reports that:
"UBS acknowledged the regulators' findings. 'We are disappointed to discover what happened,' UBS Chief Executive Sergio Ermotti said in an interview. 'We are taking responsibility for what happened.' "
Earlier this year, Planet Money wrote about "the real victims in the LIBOR scandal."