20130615 Fines more appropriate for attempted Sibor rigging

I refer to front-page article on Saturday’s ST, “133 traders tried to rig key financial rates, says MAS”.

Besides 3 big foreign banks setting aside more than $3 billion at “zero interest rate for a year” as extra reserves, nothing was mentioned about our local banks. The total amount placed with MAS could range from $8.5 billion to $12 billion.

The quantum set aside highlights the severity of the case but the MAS concluded that after a year of investigations, the rates were not “successfully manipulated” and the case simply boils down to one of attempted manipulation.
The article also stated that the traders “made several efforts to manipulate key benchmarks, including one that affects bank loans”. The ABS said “consumers who took up home loans and corporate loans were not affected by their misconduct”.

Are readers expected to believe that 4 years of attempts by 133 highly-paid, professional ethics deficient bank employees affected NOBODY? Were they doing this for fun?

Come on MAS, institutions still have to bear responsibility for the conduct of their employees, regardless of the sacking or resignation of the employees involved.
With a fine, the absolute amount a bank pays is immediately determined whereas this is not the case with placing extra reserves with the MAS.

In the Libor scandal, the Royal Bank of Scotland was fined US$612 million link and Barclays was fined $450 million for their roles in Libor fixing. link

In Singapore’s case, 20 banks and 133 traders were involved over a period of 4 years. The “lack of professional ethics” must have been extremely serious to warrant the sacking and resignation of more than 100 highly-paid employees, demotions and the reduction of bonuses.

A fine, not in the same quantum as in Libor’s case, would have been deemed appropriate. There appears to be no laws on manipulation as “MAS wants tough laws to punish benchmark manipulation” (pg 2 article).

The MAS finds “no crime seems to have been committed….” after a year of investigations but now tells the 19 banks to ‘put up billions with the MAS and please make sure you get your house in order within a year’!
The articles make little sense.

Phillip Ang

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