Banking Crackdown: Barclays Dust Settles, UBS is Next
Swiss banking giant UBS AG (NYSE:UBS) could face a fine of up to $1 billion because of its involvement in the LIBOR rate-fixing scandal, according to a report for Reuters. An unnamed source familiar with the situation said the settlement can be expected as early as next week.
Barclays PLC (NYSE:BCS) was the first bank to reach a settlement related to the LIBOR scandal. The bank paid a total of 290 million pounds ($468 million) to authorities in the United States and the United Kingdom, and fired at least five members of staff as a result of an internal review. The most notable departure was CEO Bob Diamond.
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Shortly after, Deutsche Bank (NYSE:DB) admitted that “a limited number of employees, acting on their on initiative, engaged in conduct that falls short of the Bank’s standards, and action has been taken accordingly,” and announced 1,900 layoffs, 1,500 of which were from the investment banking arm. Deutsche Bank is set to face legal questioning in the U.S. over the scandal.
Separately, Deutsche Bank is dealing with whistleblower accusations that it hid losses during the financial crisis.
If UBS is fined, it will be the second bank to be financially penalized over the scandal, but is unlikely to be the last. Over a dozen banks are under investigation from authorities all over the world as part of a global crackdown on not just the LIBOR, but bad bank behavior in general.
Just this week, HSBC Holdings (NYSE:HBC) was hit with a $1.92 billion fine for allowing clients from countries like Mexico and Iran to launder billions of dollars. U.S. regulators in particular have cracked down on money laundering, previously forcing ING Bank (NYSE:ING) to settle for $619 million for similar behavior.
The banks that still stand in front of the international shooting squad include U.S. financial titans Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JPMorgan (NYSE:JPM), who are all cooperating with authorities.
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