Westpac rolls the BBSW dice

After ANZ and NAB settled with ASIC, Westpac is going it alone in defending against rate-rigging allegations.

The normally risk-averse Westpac board has again passed up the opportunity to settle the rate-rigging case brought by the corporate cop, instead choosing to roll the dice on a Federal Court trial kicking off tomorrow morning.

By November 10, when ANZ Bank and National Australia Bank present their ceasefire deals for Federal Court approval, Westpac will have a pretty good idea if it made the right call.

The nation’s oldest bank can, of course, sue for peace any time it likes.

However, assuming there’s no change of heart overnight, or after the initial skirmishes, the court would have heard ASIC’s opening argument and Westpac’s response.

Judge Jonathan Beach would also have listened to the tape of legendary Westpac trader and managing director of group treasury Colin “The Rat” Roden expounding on one of the contentious rate-set periods.

The court would have fallen silent as Roden tells a fellow trader that Westpac had a “massive” rate set that was “going to set at 30, right, then I got it down to 23”.

“I know it’s completely wrong, but f--- it, I might as well,” he says, according to a transcript.

“We’ve got so much on it, we just had to do it.”

As the tape played, the bank’s army of lawyers would have craned their necks to get a read on Justice Beach, trying to determine if he was buying the bank’s innocent explanation for Roden’s rant.

Who knows, Westpac might even have taken the opportunity to explain the origin of Roden’s nickname, which is not the best epithet to be wearing when part of the contest comes down to the credibility of witnesses.

The bank would have protested — again — that there’s a perfectly innocent explanation.

If you Google or spellcheck Roden, the search comes back as Rodent.

It became his nickname and it stuck. It’s that simple.

The ASIC/Westpac case, if it runs its full course, is likely to conclude in the week before Christmas.

ASIC will open for two days, followed by Westpac for a day, with evidence starting on Friday.

The watchdog’s witnesses will be heard next week, with Westpac’s witnesses, including Roden, taking about two weeks.

After that there’s expert witnesses and concluding arguments.

The key for Westpac is to explain to the court why the bank trades in bank bills.

Once the platform is established, it will then be used to put the taped conversations into a benign context.

A decision is likely in the first half of next year.