BNP Paribas has been censured by Australian regulators after revealing its traders tried to influence the setting of the country’s benchmark inter-bank interest rate, the latest in a string of scandals over global rates setting. BNP will make a Australian $1 million ($874,800) donation toward promoting financial literacy after an internal investigation found communications showing derivatives traders in Singapore and BNP’s Sydney treasury desk discussed preferred settings for the Bank Bill Swap Reference Rate (BBSW), the Australian Securities and Investment Commission said. The review concluded the maximum possible benefit for BNP was A$760,000 during the period under review, from 2007 to 2010 and an ‘insignificant’ impact on the market as a whole. Global regulators have been reforming rate-setting practices after Barclays, UBS, Royal Bank of Scotland and others were hit with fines totalling billions of dollars for rigging the London Interbank Offered Rate, known as Libor. Libor and other similar inter-bank rates are used to price home loans, credit cards and other financial products worth trillions of dollars. Last year, Australia scrapped its BBSW rate-setting mechanism after an exodus of banks from the panel, the first major market to dismantle the tarnished structure.
