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Libor rigging scandal costs UBS dearly

Swiss banking giant UBS has agreed to plead guilty of its involvement in the Libor rigging scandal. The lender will have to pay US regulators a hefty fine and accept a term of probation resulting in extra scrutiny.

UBS confirmed Wednesday it would plead guilty to fraud in the US after having manipulated benchmark interest rates.

The Swiss lender accepted liability for one count of wire fraud in the

global Libor rigging scandal

, saying it would have to pay a $203-million (182 million-euro) fine and get subjected to a three-year term of probation in the US.

"The conduct of a small number of our employees was unacceptable," UBS President Axel Weber and CEO Sergio Ermotti said in a joint statement. They added that the fine would have no impact on the bank's balance sheet as the lender had already made sufficient provisions to cushion the blow.

The ghosts of the past

The US Department of Justice dropped charges against UBS in a currency rigging probe, granting it conditional immunity for cooperating with the authorities.

Nevertheless, the bank will have to pay a $342-million penalty to the US Federal Reserve and dramatically change the way its foreign exchange (forex) handling system works.

More fines were also expected to be announced later on Wednesday that might hit JPMorgan Chase, Citigroup, Barclays and Royal Bank of Scotland, AFP news agency reported.

hg/sri (AFP, Reuters)

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