UBS fined 1.5 billion but escape prosecution for Libor

The backlash from the Libor rate rigging scandal smacked UBS in the only place they could possibly feel it today. The Swiss financial giant agreed to pay out $1.5 billion to regulators in the UK, the US and Switzerland.

With quaint notions like morality, ethics and dignity long moribund in the banking sector, it seems that only fines have any chance of making an impact. Or is that just wishful thinking when the seemingly eye watering amounts can translate to a quarter’s earnings. And the real scandal is that no-one is being prosecuted - 'agreeing' to pay the fine comes with a tacit agreement from authorities not to pursue criminal charges

The Swiss bank became the second defendant in the regulatory dock following Barclays $450 million fine paid to UK and US regulators this summer. This is the same Barclays who announced a 5.9 billion pound profit in 2011.

The Libor rigging was an absolutely astonishing display of brazen dishonesty across the financial sector. Behaviour that in any other context would be labeled as that of a criminal syndicate saw the greatest fraud in history perpetrated on the world.

The UBS fine is the second-largest imposed on a bank to date, after the $1.9bn that HSBC agreed to pay US authorities earlier this month. The bank has also admitted to committing wire fraud through its Tokyo office for loans denominated in Japanese yen but tied to the Libor rate.

This all comes after the conviction of rogue trader Kweku Adoboli for gambling away £1.4bn and a 500 million dollar fine for aiding and abetting US citizens in tax evasion. UBS also suffered the worst losses of any bank from US sub-prime mortgages during the financial meltdown, totalling $ 38 billion, and saw a Swiss government bailout swing into action.

The bank still faces lawsuits in the US for mis-selling mortgage debt bundles, including a $6.4 billion claim by the US government-sponsored mortgage finance agencies Freddie Mac and Fannie Mae.

But will anything change in the long run?

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