ASIC files BBSW claim against NAB

The regulator has formally lodged a claim over alleged BBSW breaches.

ASIC has formally lodged a claim against National Australia Bank for breaches relating to bank bill swap rates, making it the third of the big four banks to be hit.

The action was widely expected after similar actions were filed against ANZ and Westpac.

CBA is the only one of the big four to have escaped legal action at this stage but that may well be just a matter of time.

The legal claims are a key part of ASIC’s cultural wars with the bank, alleging the banks manipulated rates for their own purposes and not in customers’ benefit.

ASIC is alleging that NAB traded in a manner that was “unconscionable and intended to create an artificial price for bank bills on 50 occasions during the period of 8 June 2010 and 24 December 2012.”

NAB is accused of using its large position in the bank bill market to trade with the intention of moving the swap rate higher or lower on these days, to maximise its profit or minimise its loss.

In a statement acknowledging the claim, NAB refuted the allegations, saying it takes them very seriously and has fully co-operated with ASIC’s review.

“NAB takes its role in upholding high standards of professional conduct seriously. We are

committed to service, integrity and ethics and our values reflect this,” NAB group chief risk officer David Gall said.

“Trust in the integrity of our financial markets is crucial to a strong Australian economy. A fair, well-functioning and competitive financial system is crucial to providing the best outcome for customers and the wider community.”

Meanwhile, Opposition Leader Bill Shorten responded by reiterating his call for a Royal Commission into banking.

“How many more people need to suffer and get ripped off before Mr Turnbull stops covering up for the banks?” Mr Shorten said. “Rather than hold the big banks accountable, Mr Turnbull is gifting them a $7.4 billion tax hand out.”

The bank bill swap rate, or BBSW, is the short-term rate at which banks borrow from other and a widely-used benchmark for Australian financial instruments.