Singapore’s Central Bank has censured a record 20 banks on Friday after it found that 133 traders in the city tried to rig key borrowing and currency rates.

June 18,2013 : Singapore’s Central Bank has rapped 20 banks for allowing 133 traders to attempt to manipulate interest rates and foreign exchange benchmarks for a period of four years. The probe conducted by the Monetary Authority of Singapore (MAS) marks the latest development in a global crackdown on rate rigging. In what seemed like an echo of the LIBOR scandal that rocked the city of London, Royal Bank of Scotland, Barclays, HSBC, and Standard Chartered were among the 20 banks to be censured. This is after a string of embarrassing revelations about British banks that began last year. Barclays Bank was fined £ 290 million after its traders rigged the LIBOR interest rates. RBS was fined £ 390 million.

“Although the number of traders involved represents a small proportion of the trading community in Singapore, MAS takes a serious view of the need to uphold high standards of integrity in the industry and expects the bank to foster a culture of ethical conduct among all their employees”. The central bank said in a statement.

The banks are alleged to have insufficient risk management and internal controls which allowed the traders to alter rates including the Singapore Interbank Offered Rates.

The investigations revolved under SIBOR an equivalent of LIBOR which is a collection of rates set by a panel and used as a benchmark for securities worth trillions of dollars globally. SIBOR also includes a local benchmark for commercial lending and a foreign exchange rate. None of the erring banks were penalized, but are required to hold $ 9.7 billion as general reserves with Monetary Authority of Singapore at zero percent interest until the internal inquiry is completed. The amount of reserve to be held was based on the severity of the attempted manipulation. However, under the local legislation, the attempted manipulation will not constitute a criminal offense.

The Monetary Authority of Singapore will introduce specific criminal and civil actions under the Securities and Futures Act (SFA) for manipulation of any financial benchmark. This will cover all financial benchmarks including SIBOR, SOR, and FX Benchmarks. Some of the other banks which have been censored include BNP Paribas, Bank of America, Credit Suisse, Deutsche Bank and Standard Chartered Bank. The worst offenders were the Royal Bank of Scotland (RBS) and the Union Bank of Switzerland (UBS) which were earlier fined $ 612 million and $ 1.5 billion for rigging LIBOR rates.

Roger Tan, CEO of SIAS Research, the equity research arm of Securities Investors Association said “The punishment is not light. It is a good reminder to banks to keep their governance in order. The opportunity cost of not lending the money can be quite hefty”.

The SIBOR and the SWO are used to price mortgages and other types of loans in Singapore.