UBS AG is close to finalizing a settlement with U.S. and British authorities in which the giant Swiss bank is likely to pay more than $1 billion to resolve allegations that it attempted to manipulate benchmark interest rates, the Wall Street Journal reported yesterday. UBS and the authorities are currently on track to announce the settlement early next week. Assuming the deal gets finalized, UBS will become the second bank, following Barclays PLC, to settle allegations that it attempted to manipulate benchmarks including the London interbank offered rate, or Libor, and the euro interbank offered rate, or Euribor. Together, they serve as the basis for interest rates on hundreds of trillions of loans, derivatives and other financial contracts worldwide. The settlement would conclude long-running investigations of UBS being conducted by the U.S. Commodity Futures Trading Commission, Department of Justice and the U.K. Financial Services Authority, as well as Swiss regulators. UBS has long been front and center in the rate-rigging investigations, emerging as one of the main targets of U.S. and British authorities. Since launching its own internal review into the matter, UBS has fired or suspended about 20 traders and managers who are believed to have been involved in attempted rigging. UBS executives are hoping that by resolving the rate-rigging allegations, they can close a difficult chapter for the bank.
