ANZ Sued for Rate Rigging

Shayne Elliott, ANZ CEO

Shayne Elliott, ANZ CEO

It seems rarely a day goes by without ANZ CEO Shayne Elliott or his bank making the news. Now the Australian Securities and Investment Commission has commenced legal proceedings against te company.

In a press release and statement, the Australian Securities and Investment Commission (ASIC) said it had begun legal proceedings in the Federal Court in Melbourne «for unconscionable conduct and market manipulation in relation to the ANZ's involvement in setting the bank bill swap reference rate (BBSW) in the period March 2010 to May 2012.» 

ANZ has rejected the allegations and is expected to issue a more a more detailed rebuttal to the Australian Stock Exchange (ASX). 

The BBSW is the most important and widely referenced interest rate in the Australian market. It is the base rate used to calculate payments on hundreds of billions of dollars of securities, and billions more in loans from mortgages to credit cards to corporate loans.

Overseas Tip-0ff

A small group of traders is suspected of manipulating the daily setting of the rate to increase their trading profits. The prospect that this rate has been manipulated has unsettled regulators from ASIC to Australian Prudential Regulation Authority to the Reserve Bank of Australia.

ASIC's investigation was prompted by tip-offs from overseas regulators that found evidence of widespread manipulation of over key benchmark rates such as the London Interbank Offer Rate (or LIBOR). 



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