Aussie rates probe risks hobbling benchmark
Transactions used to determine BBSW has dwindled so much that reform is needed to maintain its robustness
Sydney
AUSTRALIA'S securities regulator, suing one of the nation's biggest banks over alleged interest rate manipulation, risks further deterring the very institutions that are essential to setting the bank bill swap rate, the local equivalent of the London Interbank Offered Rate (Libor).
The Australian Securities & Investments Commission (ASIC) said last Friday that it was taking legal action against Australia & New Zealand Banking Group Ltd (ANZ) over alleged conduct relating to the rate also known as BBSW that is used as a benchmark for trillions of dollars in financing. The regulator has been investigating the process for more than three years, and in that time participation in the transactions used to determine the rate has dwindled to such a point that Reserve Bank of Australia (RBA) assistant governor Guy Debelle has said that reform is needed to maintain its robustness.
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