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New York looks into possible new rate fixing scandal

New York's banking regulator is looking into a possible new benchmark trading scandal, the Financial Times has reported. 29 Jun 2015

The Department of Financial Services (DFS) is investigating the manipulation of US interest rate swaps. The probe has not yet focused on individual banks, the Financial Times said.

The news comes after a report last week by German regulator BaFin which mentioned that a Deutsche Bank trader had attempted to manipulate Isdafix, the principal global benchmark for swap rates.

BaFin said that the trader had tried to 'rig' Isdafix in 2010 to help the bank at the expense of a client, Pimco, the Financial Times said.

Last month, the Commodity Futures Trading Commission (CFTC) fined Barclays for attempted manipulation of the Isdafix swap rate, in the first penalty issued in relation to this benchmark.

The DFS investigation will cover banks that have a New York licence, the Financial Times said.

The UK has brought a number of benchmark rates within its financial regulatory regime, including Isdafix. Since 1 April 2015, the making of false or misleading statements in relation to these rates carries is punishable with prison sentences of up to seven years and unlimited fines.