“We discussed the Euribor, and with this excuse, we reviewed the internal procedures. According to our investigations, there are no irregularities,” said Commerzbank CFO Stephan Engels.
Euribor and Libor, parameters for identifying European and British interbank rates, have now become real scandals if not investigations in Europe, Japan and even the United States.
In fact, some former Ubs Ag employees and traders, who worked at Swiss Bank, have obtained clemency from US judges to spare them a trial in exchange for their help in resolving the case.
However, there are few employees on trial who still work at UBS. The latter has in fact fired about 20 other traders who are involved in the scandal. But the real culprits are not yet known.
These leniency agreements must not imply a readjustment by UBS, or that arrests of former traders are imminent; but these moves by the judges show how the authorities are prodding to accelerate this world-class investigation.
UBS itself has disclosed requests for leniency clearances to the Justice Department's antitrust division and competition regulators in Switzerland and Canada.
The bank, however, could face impositions from the fraud section of the US Department of Justice, i.e. the Commodity Futures Trading Commission and from the English Financial Service Authority.
The anti-trust division is investigating a suspected secret deal between banks to manipulate rates, including Libor, while the anti-fraud division is focusing on a suspicion of wrongdoing within the banks.
The Swiss Bank is for now one of the main suspects by the three aforementioned authorities, who are investigating a probable manipulation of interest rates involving as many as 16 banks.
Sergio Ermotti, chief executive of UBS, told analysts in July that the bank was waiting for answers from the authorities, and that UBS made its leniency deals after reviewing millions of internal documents.
In fact, cooperating with the authorities could help UBS limit costs arising from legal costs: analysts at Morgan Stanley have in fact estimated a 250 million francs fine that UBS could pay for cooperating in resolving the Libor scandal.
But UBS is not the only bank to have made agreements with the authorities: Barclays and Deutsche Bank Ag have also agreed to collaborate with the American and European authorities.
Obviously these agreements protect the banks, but they do not protect the (former) traders, collaborators and employees.
As far as the British authorities are concerned, the Bank of England would like to reform Libor. In fact, the British government is reviewing the possibility of creating a new parameter to set interest rates.
Instead, the second largest German bank, the Commerzbank announced today that, having launched an internal investigation by its staff, no offenses were committed while sending data for the Euro Interbank Offered Rate (Euribor).
