View this article online: https://www.insurancejournal.com/news/international/2012/08/06/258311.htm
Europe’s biggest insurer, Allianz SE, is worried about the role central banks may have played in an interest rate rigging scandal that has enveloped some leading international lenders, the insurer’s chief financial officer said on Friday.
“We do not find it funny, what has happened, in particular the arising implication that it is not just the banks but central banks being involved in this,” Oliver Baete told a conference call with analysts. “That really gives us cause for concern,” he added.
An Allianz spokeswoman said Baete was speaking generally and declined to specify which central banks Baete had in mind.
More than a dozen global lenders, including Citigroup, JPMorgan and Deutsche Bank, are under investigation over whether they manipulated a benchmark interest rate called Libor in an attempt to make profits or hide weaknesses.
Royal Bank of Scotland on Friday said it had dismissed staff in the scandal, while rival Barclays was fined $453 million by U.S. and UK regulators last month.
But banking regulators, too, have come under scrutiny.
The Bank of England’s deputy governor, Paul Tucker, was ensnared in the scandal when Barclays released notes suggesting Tucker may have condoned the rigging. Tucker has denied the allegations.
U.S. Treasury Secretary Timothy Geithner said on July 26 that the Federal Reserve Bank of New York did not encourage banks to misrepresent their borrowing costs when setting Libor when he was the head of the regional Fed bank in 2008.
The Libor rate is used for $550 trillion of interest rate derivatives contracts and influences rates on a wide array of consumer products such as mortgages and credit cards.
Allianz’s Baete said Germany’s insurers were making checks on an industry level to see if any losses had been sustained but added that his own company had no third-party assets directly tied to Libor and did not expect major losses on money it manages for its internal insurance clients.