No system rot to surface from Hibor probe
Banking body says investigation about a specific case, not into a broader industry failure
An investigation into the setting of Hong Kong's interbank interest rates is unlikely to reveal any misconduct that had a major social impact because rates have been low for years, says the Hong Kong Association of Banks.
But the industry body admitted there might have been some "wilful intention" to manipulate the rates, which could dent banks' integrity and reputation.
"The recent Hibor [Hong Kong interbank offered rate] investigation is a case-specific issue, not a systemic problem," said Benjamin Hung Pi-cheng, the association's newly appointed chairman, adding that Hong Kong's interbank interest rates are set differently from other places.
Hung said Hibor rates had not moved significantly compared with interbank rates elsewhere. For example, the one-month interbank lending rate in Hong Kong stands at about 20 to 30 basis points while the three-month rate is about 40 basis points, which is "considered relatively low".
The Hong Kong Monetary Authority (HKMA) said on December 20 that it began investigating UBS over the setting of Hibor after receiving information from overseas regulators.
The HKMA had said then that it was trying to determine if there had been any misconduct by UBS in Hong Kong and, if so, whether that had any "material impact on the Hibor fixing results".
