Swiss watchdog opens bank probe into precious metal collusion

Tue Sep 29, 2015 10:46am EDT
 
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By Joshua Franklin and Jan Harvey

ZURICH/LONDON (Reuters) - The Swiss competition watchdog has launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks.

Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

Gold prices have also shed some 9 percent in the last two years as investors lose faith in its status as a store of value.

Switzerland's WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

"It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," WEKO said in a statement.

A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules.

The banks face financial penalties if WEKO finds them guilty of wrongdoing, the spokesman said, though he declined to comment on the size of any possible fine.   Continued...

 
A one kilogramm gold bar imprinted with the word 'Switzerland' is displayed in a Swiss bank in Bern November 25, 2014.    REUTERS/Ruben Sprich