Sunday, October 28, 2012

MORE THAN LIBOR...

Bloomberg News reports that other benchmarks in addition to LIBOR are being investigated for bankster fraud, including NDFs or non-deliverable forwards:
UBS, RBS Traders Suspended as Rates Probe Goes Beyond Libor
By Liam Vaughan and Sanat Vallikappen - Oct 28, 2012 6:07 PM MT
Bloomberg News

UBS AG (UBSN) and Royal Bank of Scotland Group Plc suspended more than three traders in Singapore as regulators investigating Libor-rigging turn their attention to the rates used to set prices on foreign exchange derivatives.

At least two foreign-exchange traders at UBS, Switzerland’s largest bank, have been put on leave as part of an internal probe into the manipulation of non-deliverable forwards [NDFs], a derivative traders use to speculate on the movement of currencies that are subject to domestic foreign exchange restrictions, according to a person with direct knowledge of the operation.

Unlike foreign exchange forward contracts, where two parties agree to physically exchange currencies at a set rate at a specific date in the future, NDF traders settle the net position in U.S. dollars. Who pays and how much at the end of the contract is determined by reference to a fixing rate which in some jurisdictions is set, like Libor, by a survey of banks.

2 comments:

Anonymous said...

this is civil, not criminal, right?
oh, well.

Steve J. said...

Yeah, most of them are just civil...

:-(