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Norwegian authorities investigate possible NIBOR crime

Thursday, 17 January 2013
The Norwegian Financial Supervisory Authority is examining whether there has been manipulation of the local interbank rate after complaints from a "foreign bank."

According to various Norwegian media sources, the investigation was triggered after Norges Bank received an email from a "foreign bank", with allegations of market manipulation, then a letter was forwarded to the Norwegian FSA in August.
"If this is not market manipulation, I do not know what it is, "writes a major international bank, in a letter to the central bank in March last year

Therefore, International financial institutions, feel that Norwegian banks are manipulating the interest rates to earn extra money at the expense of others, writes Norwegian daily, Aftenposten.

Representatives of Norwegina FSA says that they have not found any evidence of manual manipulation, but some market participants in general terms have indicated that volatile or abnormal fixing of rates is a "clear indication of market abuse." The money market rate is also important for lending rates on many loans, especially to businesses in Norway.

Finance Norway, the body that regulates Nibor, say they see serious allegations.
"But it was concluded that the variations in Nibor remained well within what can be explained as normal factors," said Jan Digranes, Department of Finance, Norway, said according to newspaper reports.

He also pointed out that large fluctuations in the exchange rate, because of oil-related flows, might cause Nibor to fluctuate more than other currencies. Also Norges Bank said that could be Nibor manipulated partly because banks assuming a dollar rate that differ from what they should assume the market rate.

Overall, the Norwegian Central Bank has asked the FSA to consider an investigation of possible cheating with Norwegian interest rates. Nibor (Norwegian Interbank Offered Rate) is the interest rate on loans between banks. Daily rate is set at 12 am in the morning and six Nordic banks, DNB, Danske Bank, Handelsbanken, Nordea, SEB and Swedbank are involved in setting the rates

Accusations of interest rate tinkering is now under investigation in several countries. The UK and USA has already fined two of the world's largest banks giant for pure manipulation
by Scancomark.com Team

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