Industry group to scrutinise Hibor fixing

The Hong Kong Association of Banks is reviewing the fixing procedures and governance structures of the Hong Kong interbank offered rate (Hibor), following intense central bank scrutiny of the mechanism used for the London interbank offered rate (Libor).

'In light of related incidents in other markets, the HKAB has decided to initiate a review of the fixing mechanism and governance structure of the Hong Kong dollar Hibor. The HKMA supports this review and will monitor closely its process and outcome,'' a Hong Kong Monetary Authority spokeswoman said yesterday, referring to a widening probe into Libor, a US dollar benchmark for trillions of dollars worth of financial products.

'Hong Kong dollar Hibor fixing has been in place for over 20 years. We have not observed any anomaly in its operation,'' the spokeswoman said.

Hibor is the benchmark for a range of Hong Kong dollar-denominated products, including corporate loans, credit cards and home mortgages.

The Libor probe has already claimed the scalp of Robert Diamond, who resigned as chief executive of Barclays after the bank was fined GBP290 million (HK$3.5 billion) for manipulating Libor between 2005 and 2009.

Both the Parliament and the European Commission, the EU's executive arm, are seeking to make abuse of interbank rates punishable by criminal sanctions, Bloomberg reported yesterday.