Fixed income market traders suggest the controversial practice of “pre-hedging” banks’ interest rate risk is at the heart of the corporate regulator’s investigation into ANZ Bank’s handling of a $14 billion federal government bond sale.
Anna Hughes, head of the Australian Office of Financial Management, which is the funding arm of Treasury, said the focus of regulators is a bond that was priced on April 19 last year. She added that ASIC decided to pursue its investigation, revealed by The Australian Financial Review on Monday, after a post-deal briefing.
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James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay Connect with James on Twitter. Email James at jeyers@afr.com.au
Cécile Lefort is a markets reporter based in the Sydney newsroom. Cécile worked in New York and Hong Kong writing about global capital markets. Email Cecile at cecile.lefort@afr.com
