UBS, Switzerland’s biggest bank, is reported by the Financial Times to be on the verge of closing a deal with international and domestic regulators that will cost the bank some $1.5 billion in fines. The bank will be the second financial institution – after Barclays -- to put up its hands over allegations of manipulating the London interbank offered rate (Libor).

Arrests

According to the newspaper, once the ink dries on the deal, nearly 40 bankers and mangers could be in the frame for rigging offences. But the FT cautions that not all of those individuals are ultimately likely to face either criminal or civil charges.
Still, it points out that three bankers have already been arrested in connection with a Serious Fraud Office Libor probe in the UK, including a former UBS and Citigroup trader and two traders with broker RP Martin. According to the report, all three have been bailed without charge.

RBS in frame

Sky News in the UK also reported that the predominately state-owned bank, RBS, is jousting with the Financial Services Authority over the level of fine it will have to cough up in relation to Libor rigging allegations.
The broadcaster’s City editor reported: ‘I have learned that negotiations between lawyers acting for RBS and officials at the FSA have reached an impasse over efforts by the regulator to suggest that RBS employees acted as ring-leaders in an international conspiracy to manipulate benchmark rates.'
It is understood that the FSA might have proposed a fine of £150 million, which could be discounted to take account of early settlement.