Commerce Commission delays court filings in interest rates swap case
April 2 (BusinessDesk) - The Commerce Commission has pushed out its deadline to file proceedings against three Australian-owned banks over their sale of interest rate swap contracts to farmers, saying it’s looking at new information.
The regulator had previously expected to file proceedings against ASB Bank, ANZ Bank New Zealand and Westpac New Zealand by the end of March, citing breaches of the Fair Trading Act, but now anticipates making another announcement in the middle of the year, it said in a statement. ASB is owned by Commonwealth Bank of Australia.
The commission came across new information after interviewing current and former bank staff, and will continue to hold discussions with the lenders about the information they hold and any possible resolution of the regulator’s concerns.
“This is a particularly complex case where different facts and circumstances apply to each of the three banks involved,” the commission said. “This complexity along with the new information that has been obtained meant that the original March timeframe was no longer realistic.”
Swaps allow clients to manage the interest rate exposure on their borrowings and are typically marketed to large corporations and institutions. However, from 200,5 banks began marketing them to their rural and commercial clients.
The commission began its probe in August 2012 and has received more than 140 complaints since concerns over the way the financial derivatives were sold first aired in the media.
Farmer lobby Federated Farmers was among groups seeking a review by the regulator, saying the instruments were mostly sold to its members between 2007 and 2009, with concerns about them only surfacing in the wake of the global financial crisis.