Bank of Tokyo Mitsubishi has become the latest lender to face questions in the widening interbank lending rate-rigging scandal that has shaken the global banking industry.
Japan’s biggest bank by revenues yesterday said one of its employees in London was being questioned by UK regulators over attempted manipulation of the London interbank offered rate, which is the subject of an international probe.
The BTMU employee, who was in charge of the bank’s Libor submission, has been instructed to remain at home while the bank conducts its own investigation into the matter, a representative said in Tokyo.
BTMU is the only one of the four Japanese lenders that submit Libor rates to become embroiled in the scandal. Last month, BTMU said two employees had been instructed to stay at home after questions were raised about alleged involvement in the attempted rigging of Libor while the two worked at Rabobank.
The Libor scandal has already prompted the resignation of Bob Diamond as chief executive of Barclays, after the UK bank paid £290m last month to settle its case with UK and US regulators. The chief executive of Royal Bank of Scotland, Stephen Hester, indicated last month that the bank expected to be fined for its role in the scandal. Deutsche Bank and UBS, both of which are also caught up in the scandal involving Libor and related benchmark lending rates, raised their estimates for litigation risk by a combined €580m. UBS was also one of the first to be sanctioned over its involvement in rate manipulation when the Japanese financial regulator last year found that it and Citigroup had attempted to rig both Libor and the Tokyo interbank offered rate. Analysts were puzzled by the possibility that BTMU could have been involved in the Libor scandal because Japanese banks have little apparent incentive to manipulate the rate. Toyoki Sameshima, banking analyst at BNP Paribas, said there would have been little point in lowering the rate, since during the financial crisis Japan’s lenders did not face the same concerns about their strength as European banks. Mr Sameshima said it was difficult to imagine a BTMU trader deciding to manipulate the rate, but that he or she could have been approached by staff at other banks seeking co-operation.
Japan’s biggest bank by revenues yesterday said one of its employees in London was being questioned by UK regulators over attempted manipulation of the London interbank offered rate, which is the subject of an international probe.
The BTMU employee, who was in charge of the bank’s Libor submission, has been instructed to remain at home while the bank conducts its own investigation into the matter, a representative said in Tokyo.
BTMU is the only one of the four Japanese lenders that submit Libor rates to become embroiled in the scandal. Last month, BTMU said two employees had been instructed to stay at home after questions were raised about alleged involvement in the attempted rigging of Libor while the two worked at Rabobank.
The Libor scandal has already prompted the resignation of Bob Diamond as chief executive of Barclays, after the UK bank paid £290m last month to settle its case with UK and US regulators. The chief executive of Royal Bank of Scotland, Stephen Hester, indicated last month that the bank expected to be fined for its role in the scandal. Deutsche Bank and UBS, both of which are also caught up in the scandal involving Libor and related benchmark lending rates, raised their estimates for litigation risk by a combined €580m. UBS was also one of the first to be sanctioned over its involvement in rate manipulation when the Japanese financial regulator last year found that it and Citigroup had attempted to rig both Libor and the Tokyo interbank offered rate. Analysts were puzzled by the possibility that BTMU could have been involved in the Libor scandal because Japanese banks have little apparent incentive to manipulate the rate. Toyoki Sameshima, banking analyst at BNP Paribas, said there would have been little point in lowering the rate, since during the financial crisis Japan’s lenders did not face the same concerns about their strength as European banks. Mr Sameshima said it was difficult to imagine a BTMU trader deciding to manipulate the rate, but that he or she could have been approached by staff at other banks seeking co-operation.
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