UBS to pay $1.5B in fines for rate manipulation

Updated 4:30 a.m.

GENEVA Switzerland's UBS AG agreed Wednesday to pay some $1.5 billion in fines to international regulators following a probe into the rigging of a key global interest rate.

In admitting to fraud, Switzerland's largest bank became the second bank, after Britain's Barclays PLC, to settle over the rate-rigging scandal. The fine, which will be paid to authorities in the U.S., Britain and Switzerland, also comes just over a week after HSBC PLC agreed to pay nearly $2 billion for alleged money laundering.

The settlement caps a tough year for UBS and the reputation of the global banking industry. As well as being ensnared in the industry-wide investigation into alleged manipulations of the benchmark LIBOR interest rate, short for London interbank offered rate, UBS has seen its reputation suffer in a London trial into a multibillion dollar trading scandal and ongoing tax evasion probes.

As a result of the fines, litigation, unwinding of real estate investments, restructuring and other costs, UBS said it expects to post a fourth quarter net loss of between $2.2-2.7 billion.

Nevertheless, the Zurich-based bank maintained that it "remains one of the best capitalized banks in the world."

Other banks are expected to be fined for their involvement in the LIBOR scandal. LIBOR, which is a self-policing system and relies on information that global banks submit to a British banking authority, is important because it is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.

UBS characterized the probes as "industry-wide investigations into the setting of certain benchmark rates across a range of currencies."

The UBS penalty is more than triple the $450 million in fines imposed by American and British regulators in June on Barclays for submitting false information between 2005 and 2009 to manipulate the LIBOR rates. Those fines exposed a scandal that led to the departure of Chief Executive Bob Diamond and the announcement that Chairman Marcus Agius would step down at the end of the year.

In accepting the fines, UBS said some of its employees tried to rig the LIBOR rate in several currencies, but that its Japan unit, where much of the manipulation took place, entered a plea to one count of wire fraud in an agreement with the U.S. Justice Department.

UBS said some of its personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions" and that some employees had "colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions."

UBS added that "inappropriate directions" had been submitted that were "in part motivated by a desire to avoid unfair and negative market and media perceptions during the financial crisis."

Britain's financial regulator called the misconduct by UBS "extensive and broad" with the rate-fixing carried out from UBS offices in London and Zurich.

Different desks were responsible for different rate submissions. At least 2,000 requests for inappropriate submissions were documented -- an unquantifiable number of oral requests, which by their nature would not be documented, were also made, the U.K.'s Financial Services Authority said.

"Manipulation was also discussed in internal open chat forums and group emails, and was widely known," the FSA said. "At least 45 individuals including traders, managers and senior managers were involved in, or aware of, the practice of attempting to influence submissions."

Sergio Ermotti, who was appointed CEO of UBS AG in November 2012 in the wake of a major trading scandal, said the misconduct does not reflect the bank's values or standards.

"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of the firm, and we are committed to doing business with integrity," he said.

With more than $2.4 trillion in invested assets, UBS is one of the world's largest managers of private wealth assets. At last count, the bank had 63,745 employees in 57 countries. It has said it aims for a headcount of 54,000 in 2015.

Along with Credit Suisse, the second-largest Swiss bank, UBS is on the list of the 29 "global systemically important banks" that the Basel, Switzerland-based Bank for International Settlements, the central bank for central banks, considers too big to fail.

It's not the first time that UBS has fallen afoul of regulators. Notably, in 2009, U.S. authorities fined UBS $780 million in 2009 for helping U.S. citizens avoid paying taxes.

The U.S. government has since been pushing Switzerland to loosen its rules on banking secrecy and has been trying to shed its image as a tax haven, signing deals with the United States, Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens' accounts.

In April, Ermotti called Switzerland's tax disputes with the United States and some European nations "an economic war" putting thousands of jobs at risk.

And in September 2011, the bank announced more than $2 billion in losses and blamed a 32-year-old rogue trader, Kweku Adoboli, at its London office for Britain's biggest-ever fraud at a bank.

Britain's financial regulator fined UBS, saying its internal controls were inadequate to prevent Adoboli, a relatively inexperienced trader, from making vast and risky bets. Adoboli has been sentenced to seven years in prison.

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Guns in Circulation Is Biggest Obstacle, Expert Says

Editor's Note: This post is part of a larger series by ABC News examining the complex legal, political and social issues in the gun control debate. The series is part of ABC's special coverage of the search for solutions in the wake of the tragedy at Sandy Hook Elementary School in Connecticut.

The Second Amendment of the Constitution reads: "A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed."

Despite that seemingly clear statement that Americans have the right to buy and own guns, legal experts say it does not preclude the government from enacting measures to regulate the manufacturing and distributing of firearms.

"The biggest misconception is the idea that the Second Amendment imposes serious hurdles to gun control," says Adam Winkler, law professor at UCLA and author of "Gun Fight: The Battle Over the Right to Bear Arms in America."

"The Supreme Court has made it crystal clear that there is plenty of room for effective gun control laws," he said. "The right of people to have guns and gun control are not mutually exclusive."

Legislation introduced which proports to control gun violence has historically focused on regulating high-capacity ammunition clips and certain types of semi-automatic firearms. Polling shows that these types of regulations are generally popular, and therefore proposals to ban the sale of these types of weapons and weapon accessories makes political sense.

Charles Dharapak/AP Photo

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But legislation to control sales of weapons don't address the biggest hurdle to effective gun control -- the guns that are already in circulation.

"The biggest problem for gun control today is a number: 300 million," Winkler said. "That's roughly the number of guns there are in civilian hands today. Any new law you pass confronts the reality of 300 million guns already in circulation."

Federal and state government hands are tied when it comes to regulating these already circulated firearms, he said.

"You can outlaw assault rifles for instance, say that anyone who has one, it's illegal, you have to turn it in," Winkler said. "You could do that, but they won't be turned in. It's not that you can't outlaw them, it's just that practically speaking you can't get rid of them."

Additionally, the politically popular avenue of banning the manufacturing and sale of certain types of semi-automatic weapons is inherently flawed.

For a gun to be classified as a semi-automatic, it must be designed to automatically reload a bullet after the shooter pulls the trigger. Virtually every civilian-owned gun is a type of semi-automatic gun, which means banning all semi-automatic guns would likely be read by the courts as a violation of the Second Amendment, and therefore any ban on these weapons would be limited in scope.

Automatic firearms -- those in which a shooter pulls the trigger once and the gun fires multiple rounds of bullets -- are tightly regulated and have been since the 1930s.

While regulation of certain types of semi-automatics, such as assault weapons, has broad public support, broader legislative actions are not. A recent ABC News/Washington Post poll conducted in the aftermath of the mass shooting in Newtown, Conn., found that 71 percent of Americans oppose banning the sale of handguns to everyone except law enforcement officials.

"The court's reading of the Second Amendment is completely in sync with the American public's views on firearms," said Randy Barnett, professor of constitutional law at Georgetown University. "That is, you're allowed to have firearms, you're allowed to have them in the home for self-defense. ... Americans are willing to consider reasonable regulations of that, and courts are also willing to consider that."

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Gun violence a 'national security issue'

An AR-15 style rifle is for sale at shop in Illinois. Peter Bergen says the founders did not envision weapons of this type while crafting the Second Amendment.

STORY HIGHLIGHTS

• Peter Bergen: Gun violence is sometimes called a public health issue in the U.S.


• He says it also amounts to a national security issue, taking much larger toll than terrorism


• Civilians are more likely to get killed in some U.S. cities than Afghani civilians are, he says


• Bergen: Medical techniques taken from Afghan war being used to save civilians in U.S.

Editor's note: Peter Bergen is a CNN national security analyst and author of "Manhunt: The Ten-Year Search for bin Laden, from 9/11 to Abbottabad" and "The Longest War: America's Enduring Conflict with al-Qaeda."

(CNN) -- The proliferation of semiautomatic weapons in the hands of Americans of the types that were used in the Newtown massacre is sometimes framed as a public health issue in the United States.

There is considerable merit to the notion of treating gun violence as a public health matter. After all, homicides -- around 70% of which are accomplished with firearms in the United States according to an authoritative study by the United Nations -- are the 15th leading cause of death for Americans.

Peter Bergen

But framing gun control as a public health issue doesn't quite do justice to the problem. It's probably more or less inevitable that most Americans will die of cancer or a heart attack, but why is it even plausible that so many Americans in elementary schools, colleges, movie theaters and places of worship should die at the hands of young men armed with semiautomatic weapons?

Americans generally regard themselves as belonging to an exceptional nation. And in terms of living in a religiously tolerant and enormously diverse country, Americans can certainly take some justified pride.

That tolerant pluralism was on display Sunday night at the interfaith memorial service for the 27 victims in Newtown, which featured priests from several Christian denominations, clerics of the Muslim and Baha'i faiths as well as a rabbi, a memorial that was led by the country's first African American president. But there is another side to American exceptionalism that many Americans seem strangely unable to recognize: Americans kill each other with guns at rates that are unheard of in other advanced industrialized countries. Britain, with around a fifth of the population of the United States, had 41 gun murders in 2010 while the States had around 10,000.

The scale of this death toll really resembles a national security problem as much it does a public health issue.

Consider that jihadist terrorists have only been able to kill 17 Americans in the United States since 9/11. Meanwhile, some 88,000 Americans died in gun violence from 2003 and 2010, according to the U.N. study.

That means that in the past decade, an American residing in the United States was around 5,000 times more likely to be killed by a fellow citizen armed with a gun than by a terrorist inspired by Osama bin Laden.

Consider also that there are cities in the United States today that exact a higher civilian death toll from violence than the war that is going on in Afghanistan.

Last year, some 3,000 Afghan civilians died in the Afghan War out of a population of 30 million, which makes the civilian death rate from the Afghan war 1 in 10,000.

Yet residents of New Orleans are being killed at a rate that is six times that of Afghan civilians killed in that war. New Orleans had 199 murders last year, or 6 for every 10,000 residents.

Washington, D.C., where I write this from, had 108 murders last year or 2 for every 10,000 residents, making it twice as deadly as the Afghan War is for civilians.

The numbers of Americans dying in homicidal gun violence would be even worse if it weren't for the fact that some of the techniques the U.S. military has learned on the battlefields of Iraq and Afghanistan have been imported into American hospitals. So while the number of gun-related violent incidents has actually almost doubled in the past decade, you are more likely to survive a gun shot today than would have been the case even a few years ago, as the Wall Street Journal recently reported.

Legislation to control the spread of deadly semiautomatic weapons will not, of course, eliminate such violence. Critics of efforts to tighten gun laws can point to Norway, which has very tough gun control laws, and yet Anders Breivik was able to acquire semiautomatic weapons and kill dozens of people in and around Oslo last year.

But Breivik was, in fact, an exceptional case and the murder rate in Norway is still eight times lower than in the U.S.

The Second Amendment is, of course, very much part of the American fabric. But the intent of the founders was that the amendment protected the rights of citizens to bear arms in a militia for their collective self-defense.

Today, we are not likely to need to organize local militias for our defense now we have something called the Pentagon.

Semiautomatic handguns and semiautomatic assault rifles that fire many rounds in a minute were not envisaged by the founders nor do they do much more to enhance self-defense than an ordinary pistol or rifle.

Such semiautomatic weapons also are not much use for hunting deer and the like. But they are very good for killing lots of Americans quickly.

If the murder of 20 small children in Newtown is not an opportunity for the country to challenge the theological position of the gun lobby that the Second Amendment allows pretty much any American to possess military-style weaponry, when will that day ever come?

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ASEAN-India commemorative summit to chart future ties

SINGAPORE: The achievements in 20 years of ties between ASEAN and dialogue partner India will be celebrated with a commemorative summit in New Delhi on Thursday.

ASEAN leaders and their Indian host, Prime Minister Manmohan Singh, are expected to adopt the "ASEAN-India Vision Statement" charting the future direction of their ties at the summit.

India started its Look East policy in 1992 under the late Prime Minister Narasimha Rao. At that time, Dr Manmohan Singh was the finance minister in the Indian Cabinet.

Since then there has been no turning back on India's ties with ASEAN.

India joined the ASEAN Regional Forum in 1996 and the East Asia Summit in 2005.

At the commemorative summit, Singapore's Prime Minister Lee Hsien Loong is expected to reiterate the Republic's support for India's continued engagement of the region, its participation in the ASEAN-led forums and India's contributions to the ASEAN Community-building efforts.

Mr Gopinath Pillai, chairman of the Institute of South Asian Studies in Singapore, describes the role India can play in the region.

Mr Pillai said: "From Singapore's point of view, the involvement of all the major countries is vital and India is a major player. So we would like to see India being very involved so that all the powers have a stake here and the region will prosper.

"India's business interests will grow. As it is, Southeast Asia has become a focus area for Indian businessmen -- either to directly invest in Southeast Asia or use Southeast Asia to go into other countries. It will take time but it is happening."

But there are some who still feel that India's ties with ASEAN are moving too slowly, said Mr Pillai.

Mr Pillai added: "But one has to take into account the composition of the two sides. On the ASEAN side, we have ten members and we have to reach consensus before we can move forward. On the Indian side, they have their own pre-occupations in the region, domestically, so that also delays the process."

However, growth in one area between the two sides has been significant, said observers, and that is in the area of two-way trade.

ASEAN-India total trade reached US$75 billion last year, 43 percent more than what was achieved in 2010.

And one project which economists said needs more push is the ASEAN-India Free Trade Agreement.

Negotiations on the Services and Investment Agreements are still going on, said the former chief mentor of the Confederation of Indian Industries, Tarun Das.

Mr Tarun Das said: "When we are negotiating between ten countries on one side and one country on the other side, there are 11 countries involved, and each country is different -- each country has its own strengths, weaknesses and its own concerns.

"What you are seeing is an engagement to try and address all concerns, work out compromised solutions, find the right language to be with each one's agendas and issues.'

The leaders of ASEAN and India have set a new target of achieving US$100 billion in trade between both sides by 2015.

- CNA/lp

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Poll: Half think "cliff" deal possible by year end

By Sarah Dutton, Jennifer De Pinto, Anthony Salvanto and Fred Backus

Play Video

Boehner's "fiscal cliff" concessions come with a price

With the so called "fiscal cliff" deadline looming, only half of Americans think a deal on taxes and spending cuts will be made before the end of the year. Forty-four percent expect time will run out. Democrats (58 percent) are much more optimistic about a deal than Republicans (38 percent).

Right now all parties involved - President Obama and Democrats and Republicans in Congress -- receive negative marks for how they are handling the negotiations over taxes and spending cuts.

The public is more critical of the Republicans in Congress on this matter - 69 percent disapprove of the Republicans in Congress compared to 50 percent disapproving of the president and congressional Democrats. Meantime, 38 percent approve of how the president and Democrats are handling these negotiations compared to 17 percent approving of congressional Republicans.

Raising taxes on those with household incomes of $250,000 is supported by most Americans (69 percent to 29 percent), but they are divided on reducing government services and programs that benefit people like themselves in the name of deficit reduction; 45 percent favor that, while 48 percent oppose it.

As the current debate in Washington demonstrates, there are political differences when it comes to raising taxes and reducing government programs. 84 percent of Democrats and 66 percent of independents favor raising taxes on higher income households. Even a slim 51 percent majority of Republicans support this measure for reducing the deficit.

There are large partisan differences on cutting government spending; 58 percent of Republicans favor this, while 60 percent of Democrats oppose it.

For full poll results, see next page.

____________________________________________________________________

This poll was conducted by telephone from December 12-16, 2012 among 1,179 adults nationwide. Phone numbers were dialed from samples of both standard land-line and cell phones. The error due to sampling for results based on the entire sample could be plus or minus three percentage points. The error for subgroups may be higher. This poll release conforms to the Standards of Disclosure of the National Council on Public Polls.

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Year at helm, Kim Jong Un asserts will

STORY HIGHLIGHTS

• Kim Jong Un has ruled North Korea for one year


• His father, Kim Jong Il died of heart attack on December 17, 2011


• Younger Kim departs from his father's style, but repression, malnutrition remain

Seoul, South Korea (CNN) -- Kim Jong Un cut a somber figure Monday, marking the first anniversary of his father's death. North Korea said Kim Jong Il died of a heart attack from overwork on December 17, 2011.

Hundreds of thousands of civilians and soldiers assembled outside the Kumsusan Palace of the Sun in Pyongyang where the bodies of Kim Jong Il and his father Kim Il Sung lie.

Read more: North Korea silences doubters, raises fears with rocket launch

Accompanied by his wife, Ri Sol Ju, who appeared to be heavily pregnant, Kim Jong Un bowed to giant statues of the former leaders inside the mausoleum. Outside, he listened to a commemorative speech from Choe Ryong-hae, head of the military's political arm. Choe praised the achievements of the former leaders before declaring, "Kim Jong Un is North Korea's fate and future."

A lot has changed over the past year. Kim Jong Un has transformed from grieving son to a triumphant leader leading a controversial rocket launch this month.

The 20-something leader, who was suddenly thrust into the limelight last December was considered by many outside, and possibly even inside, North Korea to be ill-prepared for the responsibilities that lay ahead. But experts say it was soon clear that the younger Kim would not be emulating the style of his father.

"Kim Jong Il was rather low profile for a few years after the death of Kim Il Sung which is in accordance with even older Confucian practices," says John Delury assistant professor at Yonsei University in Seoul, South Korea. "This is after all a dynastic system, but Kim Jong Un quickly proved by the spring that he was going to be quite public, quite active."

April 2012 brought with it one of the most significant dates on the North Korean calendar, as it marked the centenary of the birth of the country's founder Kim Il Sung, celebrations for which had been planned for years by the late Kim Jong Il. His son picked up the mantle and controversially launched a rocket in commemoration.

Following his father's example, Kim ignored international condemnation for what he called an attempt to put a working satellite into orbit. Washington, Seoul and others in the region saw the launch as a cover for testing ballistic missile technology.

Read more: Experts: Rocket launch bolsters North Korean leader

The rocket was a failure, made all the more public by the international media which had been invited into the country for the occasion. But disregarding the international embarrassment, Kim Jong Un continued with the celebrations.

"He actually performed quite well by the standard set for him," says Delury. "He spoke in public which is something his father did not and he projected a kind of confidence and energy, he really turned the young and experienced to his advantage."

The world and the people of North Korea heard the voice of the new leader for the very first time. Even more surprising was Kim's acknowledgment of his people's suffering. He told a gathering of hundreds of thousands, "Our Party is determined our people will not have to tighten their belts but will enjoy wealth and the honor of socialism."

Style-wise, Kim cuts a very different figure to his father. He is more personable and willing to interact with his people. He is often seen smiling and laughing and his wife has accompanied him on many field trips, which was unheard of during his father's reign.

Read more: Is Kim Jong Un's uncertainty driving the rockets?

"She's played a very surprising role in constructing this image of a looser, more relaxed, more open leader domestically," adds Delury.

But despite a softer side appearing on camera, little has improved for the people of North Korea. Aid groups say malnutrition is still rampant in the countryside, brutal labor camps still remain and defector groups in Seoul claim Kim has cracked down even harder on people trying to escape. They say the leader has threatened to imprison or even kill three generations of the family left behind. It's a claim CNN cannot independently confirm.

Kim has made his mark on the military, replacing some generals loyal to his father with those loyal to him.

"Certainly everyone has noticed a number of the key military figures, you know four who walked with Kim Jong Il's remains a year ago have sort of disappeared from the scene or have been reshuffled." But his statements on the South Korean or American leadership remain just as bellicose as during the his father's era and he frequently visits military barracks and installations.

Read more: What is life like inside North Korea?

Speculation about internal displeasure among some of those replaced by Kim Jong Un may be easing since last week's successful rocket launch, the second attempt in a year. "I think it earned him a lot of patriotic points," says Jasper Kim, founder of Asia-Pacific Global research Group. "So that will basically placate the military so this will give him extra room to maneuver in terms of making modernization efforts if that's his plan."

Kim Jong Un's use of the media has been a drastic departure from his father's time. Live broadcasts and televised public speeches are no longer so unusual.

Jasper Kim adds, "Kim Jong Un basically grew up on Google and his father grew up on letters and stamps. It's a new era and Kim Jong Un realizes the more he can kind of shape the narrative to the international community, the more it is to his benefit in terms of getting security and money and everything else that he wants for his country."

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India cuts growth rate forecast

NEW DELHI: India on Monday cut its growth forecast for the current fiscal year to just below six percent, putting Asia's third-largest economy on track for its worst annual performance in a decade.

The finance ministry said "supportive" moves from the central bank would be needed even for the economy to expand at the revised level of 5.7-to-5.9 percent, down from 7.85 percent estimated at the start of the year.

The forecast came a day before the bank was expected to keep the benchmark interest rate on hold as it waits for stubborn inflation to ease, despite mounting pressure for a cut to boost the sluggish economy.

"It should be possible for the economy to improve the overall growth rate of GDP (for the year) to around 5.7 percent to 5.9 percent" from 5.4 percent in the first half, said the Mid-Year Economic Analysis tabled in parliament.

The full-year rate would be far below the near double-digit pace India set before the onset of the global financial crisis.

Finance Minister P. Chidambaram has been urging the central bank to reduce high interest rates to bolster the economy.

But the bank has kept rates steady since April -- when it cut them for the first time in three years -- unlike other developing countries which have lowered borrowing costs to shield their economies from the eurozone crisis.

India's bank has insisted inflation must recede and the government needs to curb its ballooning fiscal deficit -- the widest of all emerging market economies -- before more rate cuts.

Growth in 2011-12 fell to a nine-year low of 6.5 percent hit by high interest rates, struggling overseas economies and sluggish investment caused by concerns about policymaking and corruption.

India's economy has not expanded by less than 6.5 percent since the 2002-2003 financial year.

Economists had already cut their year growth forecasts to mid-five percent or lower.

- AFP/ir

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NFL Week 15: The best photos

The Jacksonville Jaguars observe a moment of silence to honor the victims of the Connecticut school shooting before their game against the Miami Dolphins at Sun Life Stadium on Sunday, December 16. Check out the action from Week 15 of the NFL and then look back at the best photos from Week 14.

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First funerals set for Conn. shooting victims

Nov. 13, 2012 photo provided by the family via The Washington Post shows Noah Pozner, 6 / AP/Family Photo

NEWTOWN, Conn. The Connecticut Funeral Directors Association has announced that funerals have been scheduled for seven of the Connecticut school shooting victims.

Services for 6-year-olds Noah Pozner and Jack Pinto are being planned for Monday.

The funeral for 6-year-old Jessica Rekos is Tuesday.

On Wednesday, there will be funerals for 7-year-old Daniel Barden and 27-year-old teacher Victoria Soto.

23 Photos

Victims of Conn. school shooting

Services will be held on Thursday for 6-year-old Catherine Hubbard.

A private service has been planned for 6-year-old Dylan Hockley. No date was announced.

A spokesman for the local diocese, Brian Wallace, said it had not been asked yet to provide funerals for gunman Adam Lanza or his mother. Police say he shot her to death before heading to the Sandy Hook Elementary School and going on his rampage.

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