ASIC targets benchmark abuse
The Australian Securities and Investments Commission (ASIC) has warned in a report that banks need to make more of an effort to prevent abuses of key benchmarks. It states that dealers are encouraged to review compliance systems, controls, policies, management oversight and incentive structures to ensure that conduct issues don't happen in the future. The release of the report comes as ASIC investigates the possible manipulation of the bank bill swap rate (BBSW) and alleged misconduct in the foreign exchange market. Elsewhere, the chairman of ASIC, Greg Medcraft, has said that the efforts being taken by to cooperate with the investigation are "not good enough"; he said that they are finding "a very defensive approach taken by banks, which "tends to trigger suspicion even further". ASIC has been investigating 14 banks since mid-2012 in connection with the allegations; the investigation continues. The banks under investigation have not been named.
The Australian Securities and Investments Commission has laid down a blueprint for banks to fix the way they set key benchmark interest rates or face further punishment.

ASIC chair Greg Medcraft told the banks to co-operate with the corporate watchdog or confront a $50 million warchest he has built up to fight the largest banks, whose actions threaten trust and confidence in the financial system.

ASIC chairman Greg Medcraft has been left frustrated by the banks as it probes manipulation of benchmark rates. Credit: Katherine Griffiths

"We are in a system dominated by financial instutitons. We have to do our job and need to willing to take on any large instutition or combination thereof," Mr Medcraft told a press conference on Wednesday.

"Its essential and Australians expect nothing less. We have to be fearless and courageous."