Singapore CB returns up to $9b to banks in rate probe

To maintain a clean financial environment.

Singapore’s central bank gave back as much as S$12 billion ($9.3 billion) that it took from 19 lenders last year as a penalty for trying to manipulate benchmark interest rates.

Bllomberg reports that the banks have taken steps to prevent a recurrence of attempts to rig rates, the Monetary Authority of Singapore said in an e-mailed statement today. UBS AG (UBSN), Royal Bank of Scotland Group Plc and ING Group NV were among firms asked to post reserves ranging from S$100 million to S$1.2 billion for a year at zero interest in June 2013.

“It sends a strong message about Singapore’s determination to maintain the cleanest financial environment it can manage,” said Lachlan Colquhoun, head of markets analysis at research firm East & Partners in Sydney. “That said, the timing is now right and the point has been made, so it is a good gesture now to return the funds, particularly at a time when banks will need to shore up capital.”

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