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Australia proposes tougher measures on rate rigging as banks face parliamentary committee

The Australian government is cracking down on rate riggingof the country's financial benchmarks as the heads of the country's four majorbanks face a parliamentary committee over unethical bank practices.

The government has proposed that the manipulation offinancial benchmarks should become a criminal and civil offense, according toan Oct. 4 release from Treasurer Scott Morrison.

The Australian Securities and Investments Commission shouldalso develop enforceable rules for administrators of significant benchmarks andfor entities that make submissions to such benchmarks. Administrators of suchbenchmarks should also be required to hold a new license issued by ASIC.

The proposed measures follow the alleged market manipulationof the Bank Bill Swap Rate from 2010 to 2012 by major banks. ASIC is alreadypursuing legal actionagainst three of the four major banks over the alleged rate rigging.

Australian banks are also set to a parliamentary committee that willdelve into the lenders' unethical practices.

The CEOs of Commonwealth Bank of Australia, , NationalAustralia Bank Ltd. and Westpac Banking Corp. will each be questioned for threehours by a 10-member panel, starting Oct. 4, Reuters reported Oct. 3.

The committee will focus on unethical bank practices,according to committee member Matt Thistlethwaite. Another committee membersaid he planned to ask questions on competition and may make recommendationsthat would require greater oversight of big banks.