More News
RETAIL BANKING | Staff Reporter, Australia
view(s)

CBA to shell out $18.67m in penalties for rate manipulation

The embattled bank has been accused of rigging the Bank Bill Swap Rate.

Embattled lender Commonwealth Bank of Australia (CBA) has agreed to pay $18.67m (A$25m) after it admitted to what it called unconscionable behavior in trading on the Bank Bill Swap Rate (BBSW) market.

The Australian Securities and Investments Commission (ASIC) brought a legal case against the bank which it accused of “trading with the intention of affecting the level at which BSW was set so as to maximise its profits or minimise its losses to the detriment of those holding opposite positions to CBA's."

The BBSW is a benchmark used to set the price of Australian financial products such as bonds and loans.

Both parties have reached an in-principle agreement with CBA agreeing to pay $3.73m (A$5m) penalty, $11.2m (A$15m) to a financial consumer protection fund and $3.73m ($5m) for ASIC’s litigation and investigation costs.

Also read: Housing downturn pushes Australian banks' credit growth down to 5.1% in March

“As part of the in-principle settlement, CBA will acknowledge that, in the course of trading on the BBSW market in Australia on five occasions between February and June 2012, CBA attempted to engage in unconscionable conduct in breach of the ASIC Act,” the bank said in a statement. “CBA will also acknowledge it did not have adequate policies and systems in place to monitor the trading and communications of its staff in order to prevent that conduct from occurring.”

The moves deals another heavy blow to the Australian lender after the bank revealed that it lost nearly 20 million bank account records which containts 15 years of customer data.  

CBA also faces intense scrutiny by a Royal Commission alongside the country’s major banking players for industry malpractice.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.