UBS to pay $1.5bn to settle charges that traders rigged Libor rates

UBS AG will pay around $1.5bn (€1.15bn) to settle charges that a group of traders at its Japanese unit rigged Libor interest rates, a source familiar with the matter said yesterday as the Swiss bank prepares for a deal with regulators.

The fine, to be imposed by the US and Britain, would be the latest blow to UBS after a $2.3bn rogue trading loss in London last year, a $780m fine after a US tax investigation in 2009 and its near collapse in 2008 under the weight of losses on US sub-prime mortgage lending.

UBS will admit that roughly 36 of its traders around the globe manipulated yen Libor between 2005 and 2010, according to the source, with a final deal not expected before tomorrow.