The inquiry into interest-rate fixing at UBS extended yesterday as the Hong Kong Monetary Authority, effectively the territory's central bank, said it had been tipped off by other regulators that its local benchmark may have been rigged.
The HKMA said it had launched an investigation to determine whether there was any wrongdoing by UBS when it submitted information used to set the Hong Kong Interbank Offered Rate, known as Hibor. It will also try to find out if the misconduct had any "material impact" on setting the rate.
The move comes a day after UBS agreed to pay £940m to regulators in the UK, the United States and Switzerland and two of its traders were arrested.
It also emerged that the US mortgage lenders Fannie Mae and Freddie Mac could have lost as much as $3bn (£1.8bn) because of Libor-rigging. The Federal Housing Finance Agency, the regulator which oversees the two government-backed lenders, said that the $3bn estimate was preliminary and it had not yet decided whether it would be taking legal action against banks.
Fannie Mae and Freddie Mac, which were rescued by the US government in 2008 during the subprime lending crisis, account for about half of all mortgages in the US.
UBS is still being investigated by Japanese regulators because Tokyo appears to have been at the centre of the bank's rate-fixing activities.
The extension to Hong Kong could see other countries in the region launch investigations.