More powers? ASIC already has the tools to pursue BBSW manipulation allegations

by Dr. Andy Schmulow

Scott Morrison, the federal treasurer, has announced a raft of new measures to tackle bank bill swap rate (BBSW) manipulation, which is alleged to have been committed by three of Australia’s big four banks.
The measures will include civil and criminal liability for bankers found guilty of manipulating these rates in future. Morrison’s announcement has come six years after the scandal first broke. During the same period, regulators in the UK have brought offenders to trial and achieved a number of convictions. Tom Hayes, for example, was convicted and sent to jail for 14 years.

Regulators in the United States have arrested, among others, UK citizens such as Mark Johnson, HSBC’s global head of foreign exchange, and Stuart Scott, then head of FX trading in Europe, for manipulating rates not in the United States, but in the UK, five years prior to their arrests. They were arrested in July 2016 while transferring through John F Kennedy International Airport.

By comparison, the Australian Securities and Investments Commission (ASIC) has dragged its feet spectacularly on prosecuting rate rigging. In respect of some of the alleged wrongdoing the clock has run out and ASIC is now no longer able to prosecute. Nor was it the regulator that uncovered the BBSW scandal in the first place; the information was volunteered by BNP Paribas.