UBS is closing in on an agreement regarding the Libor rate-rigging scandal that saw Barclays pay $450m (£280m) in penalty in June this year, and is expected to shell out more than what Barclays paid, over claims that some of UBS employees submitted false Libor rates, as reported by the New York Times.
Switzerland-based UBS said its is in negotiations with the US and the UK authorities regarding the penalty in connection with Libor investigations and had been fully cooperative with the regulatory and enforcement authorities.
The total amount that would be levied on UBS will probably be revealed next week, as regulators investigate whether UBS traders worked with other banks to influence rates in an effort to increase profit.
If UBS agrees to the deals with various authorities, the collective penalties would yield the largest total fines to date related to the rate-rigging inquiry and would increase the likelihood that other financial institutions would face stiff penalties.
The UBS case will provide a peak into the systemic problems in the rate-setting process, which affects how consumers and companies borrow money across the globe. After reviewing thousands of internal bank e-mails and interviewing dozens of employees, the authorities have uncovered patterns of abuse at the major banks that help set benchmark interest rates.
UBS is likely to put pressure over the reformation of the Libor system. The reform movement gained momentum after global authorities secured the settlement with Barclays in June. Regulators had accused Barclays of reporting false Libor rates, a scandal that ensued the resignation of the chief executive and other top officials at the bank.