Judge and Zuber seek commerce in rates case
A Federal Court judge has zeroed in on the case for any "legitimate purposes" afforded to Westpac in its defence against claims by ASIC that the bank engaged in unconscionable conduct in the bank bill market some years ago.Curt Zuber, Westpac's group treasurer, yesterday took the stand on the 12th day of hearings in Melbourne. This gave a senior executive of the bank the chance to add context to Westpac's efforts to rebut ASIC's claims of 'contraventions' on a dozen or so occasions in the bills market between 2010 and 2012.Most of the material put to Zuber and an associate from the bank's financial markets arm yesterday centred on interpretations of trading and conversations, most often involving Zuber's subordinate, Colin Roden."I was a group treasurer of the bank at the time. I understand the dynamics of our liquidity, our funding, our cash, our risk, our rates sets, our inventory, all those things," Zuber told Justice Jonathan Beach."I came up with what I thought to be some reasons of what [Roden] was doing and how he conducted himself, and I saw nothing in any of those trades that gave any implications that there was even an instance where his activity was to manipulate the rate. It was all commercial, that's what I'm saying," Zuber said."I said a number of times [in my affidavit] that it was not unusual for me and the team to talk about the priority of funding liquidity, post the government guarantee [in 2008], during a European debt crisis at a time we were trying to take our liquidity from A$20 billion to $110 billion."Justice Beach jumped in to share thinking with ASIC's counsel, Philip Crutchfield."I have had a look at the statement in some detail and the witness has gone through each of the days and said, 'Here are the objective trades', and then he has explained how he sees them as being consistent with various of the bank's purposes. "So, he has gone through each of those dates and you're asking me to find a sole or dominant purpose. So it's a matter for you: are you challenging the objective articulation of the various financial issues and the figures and the analysis done by Mr Zuber?" Justice Beach asked."No. In essence we're not," Crutchfield responded.His Honour continued: "You're not really challenging the objective data used by Mr Zuber on each of these contravention dates, nor are you challenging his opinion that the data. And the positions are consistent with these other legitimate purposes."I will say to you [that] on your sole or dominant purpose case, for each of these contravention dates I will have to identify the sole or dominant purpose for the trading. "You confine yourself to the individual trader, their state of mind and say that's to be attributed to the corporation, that's the end of the discussion. "But even on that lens, I'm going to have to determine for myself the sole or dominant purpose of the individual trader through that lens of