TOKYO — Japanese financial regulators called on Friday for penalties against Citigroup and UBS, accusing them of trying to manipulate interest rates at which they borrow from each other, broadening an international inquiry into some of the world’s biggest banks.
In two statements, the Japanese Securities and Exchange Surveillance Commission said employees of the banks’ local units had repeatedly tried to influence the Tokyo Interbank Offered Rate, or Tibor, by asking other banks for an advantageous rate. There was no evidence that the Tibor rate was actually manipulated, the commission said. However, both banks lacked internal controls to make sure employees did not try to manipulate rates, it said, and recommended that Japan’s Financial Services Agency issue censures.
Tibor and its equivalent in Europe, the London Interbank Offered Rate, are measures of how much banks charge one another for loans. They are an important barometer of the health of the market and the financial system, and affect the payments made by millions of homeowners and other borrowers. The rates are set daily by bankers’ associations based on data provided by member banks on costs of borrowing from one another.
In a statement, the Japanese brokerage unit of Citigroup said it was taking “necessary actions” to address regulators’ concerns. Jason Kendy, a spokesman in Tokyo for the Swiss bank UBS, said, ”We take these findings very seriously, and have been working with the S.E.S.C. and the F.S.A. to ensure all issues are addressed and resolved.”
Apart from the Tibor inquiry, Citigroup is facing potential penalties in Japan over possibly failing to fully explain product risk to retail customers, according to Bloomberg News.
Article source: http://feeds.nytimes.com/click.phdo?i=db586b500e4091bf87ce79f45c593ad2
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