Yahoo – AFP, Nina Larson, 28 Sep 2015
Swiss competition authorities are investigating UBS, HSBC, Deutsche Bank
and four other banks on suspicion of price fixing in the precious metals market
(AFP Photo/Fabrice Coffrini)
Geneva (AFP) - Swiss competition authorities said Monday they were investigating UBS, HSBC, Deutsche Bank and four other major banks for suspected price fixing in the trade of precious metals like gold and silver.
The Swiss Competition Commission (COMCO) said it was looking into whether seven banks had colluded to manipulate prices in the precious metals market.
The watchdog said in a statement that it had "opened an investigation against two Swiss banks, UBS and Julius Baer, as well as against the foreign financial institutions Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui."
The Swiss Competition Commission says
it is investigating two Swiss banks, UBS
and Julius Baer, as well as against the
foreign financial institutions Deutsche
Bank,HSBC, Barclays, Morgan Stanley
and Mitsui (AFP Photo/Fabrice Coffrini)
"We think they can have manipulated the price of these precious metals," COMCO deputy chief Patric Ducrey told AFP.
The competition authority said it especially suspected the banks had fixed the prices of bid/ask spreads within the market.
Ducrey said the banks had all been informed of the ongoing probe, and that the investigation would likely conclude in 2017.
Credit Suisse analyst Cristine Schmid told AFP it was too early to say how the COMCO probe would impact the targeted banks, beyond pushing up their legal costs.
HSBC is one of several banks being
investigated by Swiss authorities for
price fixing (AFP Photo/Philippe Huguen)
This was not the first time the role of banks in determining the price of precious metals has been questioned.
In August, the European Commission said it was investigating "anti-competitive behaviour in precious metals spot trading."
And in February, US financial media reported that the Justice Department had opened its own investigation into suspected manipulation of precious metals markets by 10 major international banks: HSBC, Bank of Nova Scotia, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Societe Generale, Standard Bank and UBS.
Goldman Sachs, HSBC, Standard Bank of South Africa and the German chemical group BASF have also been under a US investigation since last November over a complaint alleging rigging of the prices of platinum and palladium.
There are moves underway to reform the
century-old method of gold price "fixing,"
since the current global benchmark,
London's Gold Fix, has already been
tainted by a rigging scandal (AFP
UBS, which did not immediately return requests for comment Monday, said in May it had won immunity from criminal fraud charges in the US probe, after agreeing to provide the Justice Department with information about precious metal transactions.
Reform under way
Precious metals have increasingly come under scrutiny after the discovery that other financial benchmarks have been rigged.
Some of the banks under investigation Monday were already hit by massive fines earlier this year after pleading guilty to US charges of conspiring to rig Libor rates, the global commercial interest rate benchmark used to peg millions of rate-sensitive contracts and loans around the world.
Traders operate in the pit at the London
Metal Exchange in central London, 21
September 2007 (AFP Photo/Shaun Curry)
The price-setting mechanism to determine benchmark prices for precious metals has also been under reform, amid calls for greater transparency.
Panels of banks have until recently agreed on the reference prices for the precious metals.
But last year, the exchange CME Group and financial information giant Thomson Reuters began providing an electronic system for setting benchmark silver prices, and the London Metal Exchange (LME) did the same for platinum and palladium.
There are also moves under way to reform the century-old method of gold price "fixing," since the current global benchmark, London's Gold Fix, has already been tainted by a rigging scandal and attacked by critics as old-fashioned.
A new method for setting the gold benchmark price is expected to take effect in March.