UBS to pay $1.5B in Libor probe settlement

In the largest fine issued in a probe of interest-rate manipulation by major banks, UBS has agreed to pay $1.5 billion in a settlement with U.S. and European authorities.

The Switzerland-based bank said it had reached settlements with the Department of Justice and the Commodity Futures Trading Commission in the U.S. as well as with British and Swiss authorities. A division of the bank in Japan also agreed to plead guilty to one count of wire fraud related to the scandal.

The settlement is the latest concerning the London Interbank Offered Rate, or Libor, a benchmark interest rate that is supposed to be an average of certain rates offered by major banks. Authorities say that during the financial crisis, banks manipulated their submissions to the group that calculates Libor, in part to make the banks appear healthier.

UBS is paying much more than the $450 million that Britain's Barclays Bank agreed to pay in the scandal. Days after that agreement was announced in June, most of Barclays' top management, including Chief Executive Bob Diamond and Chairman Marcus Agius, resigned.