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ANZ Bank fires trader over messages amid benchmark probe
[SYDNEY] Australia & New Zealand Banking Group Ltd said it fired a trader over inappropriate messages uncovered as a result of a probe into possible manipulation of Australia's interest-rate benchmark.
The employee, who hasn't been named, was one of seven suspended as a precaution in November while the bank cooperated with a regulatory investigation into the setting of the nation's bank bill swap rate. The worker was dismissed Friday after a resulting code of conduct review found evidence of "inappropriate electronic communication" that wasn't related to "markets trading practices," the bank said in a statement.
The Australian Securities & Investments Commission has been investigating the setting of BBSW, the local equivalent of Libor, since mid 2012 but is yet to draw any conclusions. Other regulators' probes into the rigging of foreign-exchange markets and interest-rate benchmarks has led to lenders across the globe paying billions of dollars in fines.
"We have more than 1,000 staff in our markets operations, the vast majority of whom work responsibly in line with our values and our code of conduct," ANZ Bank's Chief Risk Officer Nigel Williams said in the e-mailed statement. "We will however continue to learn from the findings of our review as it unfolds and take any necessary action."
ANZ Bank said it was continuing to cooperate with the ASIC probe. The lender had extended its own internal review to include compliance with its code of conduct including "use of systems, equipment and information policy." Friday's dismissal was a result of the broader code of conduct review, the bank said. "Investigations related to other staff have either been completed or are ongoing," it said.
The dismissal sends out a clear message that "transgressions will not be tolerated any more by banks and regulators," Martin Smith, head of markets analysis at Sydney- based East & Partners Pty, said by telephone. "Customers deserve a high level of clarity and professionalism in such communication." The Australian Financial Markets Association said in 2013 it would shut the 14-bank, rate-setting panel and move to a mechanism where the benchmark is compiled directly using prices from brokers and electronic markets.
At least A$350 billion of Australian syndicated loans and floating-rate bonds are priced off BBSW, according to data compiled by Bloomberg in 2013.
The ASIC investigation has resulted in voluntary contributions of a combined A$3.6 million (S$3.6 million) toward financial literacy projects from Royal Bank of Scotland Group Plc, UBS Group AG and BNP Paribas SA.