Back to top

Analyst Blog

As per Reuters, JPMorgan Chase & Co. (JPM - Analyst Report) is withdrawing from the rate-setting panel of Australia's benchmark interbank lending rates by the end of this month. It is widely speculated that the decision was driven by intense scrutiny, which the company is currently facing for its alleged role in London interbank offered rate or LIBOR manipulation scandal.

With the imminent exit of JPMorgan, the panel that sets Australia's bank bill swap (BBSW) reference rate, supervised by the Australian Financial Markets Association (AFMA), will fall to 12 from 14. Earlier in February, Swiss bank UBS AG (UBS - Analyst Report) pulled out of the panel after it was penalized $1.5 billion by the U.S., UK and Swiss authorities to resolve charges against the bank for its involvement in the manipulation of LIBOR.

The authorities have come down hard on such unwarranted activities of the banks by levying hefty fines. Banking biggies including Barclays PLC (BCS - Analyst Report) and The Royal Bank of Scotland Group plc (RBS - Snapshot Report) have also been penalized.

Besides Australia, JPMorgan is planning to reduce its participation in the other regional rate setting panels. It is to be noted that the company is not accused of manipulating BBSW unlike UBS.

Amid intense scrutiny, following the LIBOR rigging scandal, banks across the globe have been departing from regional rate setting panels. For instance, Citigroup Inc. is reducing its role in setting Malaysia’s benchmark rate, whereas Dutch lender Rabobank pulled out of the EURIBOR panel. Royal Bank departed from interbank panels in Singapore, Hong Kong and Tokyo.

The departure indicates that rates will become less competent at determining the borrowing costs, with fewer global institutions participating. However, it is wiser for the institutions to move out given stringent regulations and augmented legal liabilities, which may result in increased litigation expenditure.

Currently, JPMorgan carries a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%