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ANZ will pay a total of A$50m ($38.4m) in fines and related costs after settling with Australia’s securities watchdog over allegations it rigged the country’s benchmark interest rate.
The bank, which last month inked an in-principle agreement with the Australian Securities and Investments Commission, will pay a A$10m penalty, make A$20m payments to a Financial Consumer Protection Fund and make a separate $20m payment towards the regulator’s costs.
The settlement has been approved by the Federal Court, the bank said on Friday.
In its suit, the commission alleged that ANZ traded in a manner intended to create an artificial price for bank bills on 44 separate days between March 2010 and May 2012. ANZ traded in the bank bill market with the intention of moving the benchmark reference rate higher or lower, ASIC said.
ANZ previously rejected the allegations, saying it would be “vigorously defending legal action brought by the commission”.
However, in a statement to the stock market on Friday, the bank said it “has acknowledged that, in the course of trading on the [bank bill swap rate] market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012.”
The bank said it also “did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders”.
In a statement, ANZ chief risk officer Nigel Williams commented:
We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour.
The bank has also agreed to allow an independent expert to monitor its bank bill swap rate business.
The settlement follows the commission’s investigation into suspicions that traders at several banks manipulated the daily rate setting to increase their trading profits for several years. It has already imposed “enforceable undertakings” on UBS, BNP Paribas and Royal Bank of Scotland following investigations into misconduct related to the benchmark rate.
Among Australia’s biggest lenders, National Australia Bank has also indicated it will settle with the regulator while Westpac has vowed to fight similar allegations in court.