What Does the Libor Scandal Mean for Swiss Banks?

As the Libor fixing scandal embroils the UK banking sector, the question is: which other banks will be slapped with fines?

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In Switzerland, UBS and Credit Suisse are also being probed by several international regulators about their role in illegal Libor fixing. This was clearly flagged by both banks in their annual reports, while the focus over the past few months has undoubtedly been on UBS.

UBS was one of the first banks to actively work with international antitrust regulators and file a lawsuit against itself for its role in the alleged Libor fixing. UBS first disclosed the probe in its 2009 annual report and explained its cooperation at greater length in its 2011 annual report.

”UBS has been granted conditional leniency or conditional immunity from authorities in certain jurisdictions," the report said.

This includes the Antitrust Division of the Department of Justice and Swiss competiition authority WEKO, as well as the Canadian Competiton Bureau for “potential competition law violations” relating to submissions of a number of Libor quotes (Swiss franc , yen Libor and Euroyen Tibor).

It added: ”As a result of these conditional grants, we will not be subject to prosecutions, fines or other sanctions for antitrust or competition law violations in the jurisdictions, subject to our cooperation”.

However, UBS warned that this did not preclude the respective governments from making other claims against the bank or private parties from filing civil claims.

Press reports also suggest that the bank has also laid off a number of traders involved in the libor fixing activies.

A European banking analyst, who did not want to be named, told CNBC that while he is concerned about the investigation’s impact on Swiss banks UBS and Credit Suisse, this is largely because it is an industry-wide and systemic issue, not because either of the banks is believed to have been the worst offender.

He adds banks were engaged in the libor fixing activities to different degrees, meaning not every bank will see a heavy fine similar to the one given to Barclays . He says at this point it is too difficult to say how big the fines will be for every institution but warns that potential class action lawsuits and litigation make the final cost for banks very uncertain.

UBS says in a statement, e-mailed to CNBC: ”We are taking these investigations very seriously and are fully cooperating with the authorities."

Credit Suisse meanwhile has been associated a lot less with the probe than its Swiss rival, and analysts expect its role in the libor fixing scandal to have been very limited. The general consensus is that the bank won’t be fined or that a fine will be very low. In its 2011 annual report Credit Suisse wrote: ”Credit Suisse is not a panel bank for Yen Libor, Yen Tibor or Euroyen Tibor. Credit Suisse is cooperating fully with these investigations.”