Dozens of UBS staff manipulated the Libor rate, which is used to price trillions of dollars worth of loans, across three continents in collusion with brokers and traders at other banks, according to an international investigation.
The controversy is expected to ensnare other big lenders and spark civil lawsuits as well as possible criminal proceedings against individuals involved. The penalty UBS agreed to with U.S., UK and Swiss authorities far exceeds the $450 million levied on Britain's Barclays in June, also for rigging Libor, and it is the second largest ever imposed on a bank.
"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm," said UBS CEO Sergio Ermotti.
The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards to complex derivatives.