INTEREST RATE SWAPS – AUSTRALIA

CBA accepts undertaking over BBSW

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 12-Jul-18

The Australian Securities & Investment Commission has advised that the Commonwealth Bank of Australia has agreed to an enforceable undertaking with regard to the bank bill swap rate. CBA will pay $25m in fines and costs to settle ASIC’s case over allegations that the bank manipulated the BBSW. National Australia Bank and the ANZ Bank both agreed to pay $50m in total to settle their BBSW cases.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL COURT OF AUSTRALIA

RBA sidelined as cost of money rises

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 28-Jun-18

Futures market pricing suggests that investors expect the Reserve Bank of Australia to keep official interest rates on hold until late 2019. However, the gap between the cash rate and the bank bill swap rate has increased to 61 basis points, compared with an average of 18 basis points for much of the last decade. The rise in the BBSW may eventually prompt Australia’s major banks to increase their mortgage interest rates independently of the RBA, with several of the nation’s smaller lenders having already done so.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF QUEENSLAND LIMITED – ASX BOQ, ME BANK, AMP BANK LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IFM INVESTORS PTY LTD

CBA gets green light for BBSW settlement

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Original article by James Frost
The Australian Financial Review – Page: 20 : 22-Jun-18

Federal Court judge Jonathan Beach has ruled that the Commonwealth Bank of Australia’s $A25m settlement for manipulating the bank bill swap rate is appropriate. Justice Jonathan Beach said the magnitude of the fines should be sufficient to deter similar misconduct. However, he criticised CBA’s bank bill traders for abusing their "privileged position" and questioned the adequacy of training and monitoring of the bank’s traders.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC

Bank’s conduct unconscionable

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Original article by Ben Butler
The Australian – Page: 19 & 23 : 25-May-18

Westpac faces a maximum fine of $A3.3m after the Federal Court upheld three unconscionable conduct charges with regard to the bank bill swap rate. However, the court ruled that the trades did not amount to market manipulation. Westpac would have faced penalties of up to $A2bn under revised laws that took effect after the offences in question. Its three major rivals had agreed to out-of-court settlements with the Australian Securities & Investments Commission over allegations of unconscionable conduct.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

CBA falls as legal costs take toll on profit

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Original article by Michael Roddan
The Australian – Page: 19 & 24 : 10-May-18

The Commonwealth Bank of Australia has posted an underlying cash net profit of $A2.35bn for the March quarter, which is nine per cent lower than previously. CBA has advised of an increase in home loan, personal loan and credit card arrears during the period, while its expenses rose by three per cent. Meanwhile, CBA has agreed to pay fines totalling $A25m to settle allegations that it manipulated the bank bill swap rate.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, DIGITAL FINANCE ANALYTICS, FEDERAL COURT OF AUSTRALIA

CBA executive was warned of possible BBSW investigation

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 19 & 23 : 9-Mar-18

The Federal Court has released documents filed by the Australian Securities & Investments Commission in its case against the Commonwealth Bank of Australia for allegedly manipulating the bank bill swap rate. The documents show that CBA executives and employees had discussed influencing the BBSW as far back as 2001. Amongst other things, CBA executive Paul Bennett told former treasurer Lyn Cobley in 2011 that "aggressive" behaviour in the BBSW market by a rival bank could attract regulatory scrutiny.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PIMCO AUSTRALIA PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD

ASIC expands rate-rigging case at CBA

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Original article by Patrick Durkin
The Australian Financial Review – Page: 11 : 27-Feb-18

The Australian Securities & Investments Commission is now alleging that Commonwealth Bank traders tried to manipulate the interbank lending rate on six occasions. It had previously only contended that such manipulation had occurred on three dates. National Australia Bank and the ANZ Bank have already paid fines to settle their cases with ASIC, while Federal Court Justice Jonathan Beach is expected to soon hand down his decision in regard to ASIC’s case against Westpac.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA

No mischief at Westpac, Rat told RBA

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Original article by James Frost
The Australian Financial Review – Page: 26 : 20-Dec-17

Transcripts from the court case concerning the activities of Westpac traders in regard to alleged manipulation of the bank bill swap rate were released by Federal Court Justice Jonathan Beach on 19 December. Closing submissions were presented on 14 December, and a judgment is not expected until 2018. The transcripts were taken from phone calls, including one made by Westpac trader Colin Roden to Reserve Bank of Australia official Matt Boge, in which Roden seeks to assure that himself and fellow traders are not up to any "mischief".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN FINANCIAL MARKETS ASSOCIATION INCORPORATED

Westpac legal team casts doubt on ASIC evidence

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Original article by James Frost
The Australian Financial Review – Page: 19 : 15-Dec-17

Closing arguments in the Australian Securities & Investment Commission’s bank bill swap rate rigging case against Westpac continue to be heard in the Federal Court. Matthew Darke SC, appearing for Westpac, told the court that it was wrong for ASIC to claim that the evidence it had presented was "gilt edged". He added that many of the comments of Westpac traders that were recorded on tapes and transcripts are open to interpretation. A decision on the case could potentially by delayed until April 2018.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

NAB traders didn’t read swap rate rules

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Original article by James Frost
The Australian Financial Review – Page: 18 : 14-Nov-17

Former National Australia Bank trader Brock Johnson has admitted that he was not aware of the rules governing the bank bill swap rate (BBSW). NAB, like the ANZ Bank, has settled with the Australian Securities & Investments Commission over allegations that they tried to rig the BBSW, but ASIC is still pursuing its case against Westpac over the matter. Johnson has told the Federal Court that he had not read the Australian Financial Markets Association’s rules concerning the BBSW.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN FINANCIAL MARKETS ASSOCIATION INCORPORATED