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LISBON - The EU investigation into a "shocking" interest-rate rigging scandal in the world's biggest money market in London also includes Japan, EU Competition Commissioner Joaquin Almunia said on Friday.
"The alleged rate-rigging is a major competition concern," Almunia told a conference on competition here .
"This is why we started investigating a number of banks last year for their possible concerted manipulation of (interest rate) benchmarks such as LIBOR, EURIBOR and TIBOR, the Tokyo rate, for several currencies," he said.
"The investigations have top priority because this sort of collusion can seriously harm competition worldwide and on our continent in particular," he added.
The Japanese Bankers Association said it’s considering looking at as many as 16 banks to confirm that they follow guidelines for submitting yen-denominated Tokyo interbank offered rates. In South Korea, the antitrust agency expanded an investigation today into whether local brokerages kept certificate of deposit rates artificially high.
On Monday, Royal Bank of Scotland said it had removed itself from a panel in Singapore that sets interbank lending rates there, following an internal review.
RBS had exited similar panels in Tokyo and Hong Kong, and Barclays PLC plans to pull out of the rate-setting panel for interbank lending in the United Arab Emirates.
"It's a defensive move to be less involved in less significant indexes just to minimize any type of exposure while (the Libor investigation) is going on," said Dan Geller, executive vice president of Market Rates Insight, which provides banks with pricing data.
"Currently in the U.S. and in many parts of the world, gold bullion is classified as a risk asset on which banks are allowed a 50% weighting. This means that for every $1.00 of gold bullion held, $0.50 worth is recognized as value on the books of the banks or central banks. The whole $1.00 is not recognized, because there is a risk, according to the classification, that gold bullion could lose its value rapidly.
Again, these are classifications created by central banks and have no bearing on the true value that the market will place on gold bullion.
Still, it is significant that the U.S. is proposing to reclassify gold bullion as a zero-risk asset, as early as January 1, 2013. This means that gold bullion will join the very short list of assets considered zero-risk by the Federal Reserve: U.S. Treasuries; the U.S. dollar; and assets and/or claims with the International Monetary Fund."