RBS fined £390m over Libor

The Royal Bank of Scotland has been fined £390m by the Financial Services Authority and US authorities for its role in the Libor rate-rigging scandal.

Latest ITV News reports

Trader boasts over rate manipulation

In extracts from the report by the Commodity Futures Trading Commission in the US, a senior Yen trader boasts about how RBS succeeded in moving six-month Yen Libor and then discussed what false story they could give to justify a low submission:

Extract from CFTC report
Extract from CFTC report Credit: COMMODITY FUTURES TRADING COMMISSION

Records show the conversation continued:

"We will say we lower every tenor .. 1m 3m 6m .. we feel rbs name has very good credit .. no problem getting money in good way to boost share price! our 3m libor is at top end ... 6m at bottom end ... just the ideal level!"

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RBS rate rigging 'did not affect UK mortgages'

The bank's traders were based in London, Singapore and Toyko and traded in Swiss Francs and Yen Libor - not Sterling. That means they were not rigging the rates that affect UK mortgages, loan rates or credit cards. This is an important difference between what has happened with Barclays.

Headquarters of the Royal Bank of Scotland in the City of London
Headquarters of the Royal Bank of Scotland in the City of London Credit: Press Association

What exactly is Libor?

RBS fined £390m for rigging Libor rates

  • RBS will pay fines of £390 million pounds for the behaviour of 21 members of staff between 2006 and 2010
  • 14 of those staff have already left, 7 are either in disciplinary proceedings or on their way out or were very junior so won't lose their jobs
  • The bank will pay £300 million - the share of the fine to go to the American authorities - through getting back money from bonuses that have already been paid, or this year's bonuses or future payments
  • The other £90 million will come from the investment bank's profits and go to the Treasury

Non-UK fines 'responsibility of the banks'

I am not aware that any announcements have been made by the regulators. If any were made, the Government has made its position very clear.

Banks should take responsibility, and if there are any non-UK fines, those should be the responsibility of the banks and not the taxpayer.

I think that is what you can expect to see if we are in that situation.

– DOWNING STREET STATEMENT

Report: RBS investment bank manager to quit with £700k payoff

John Hourican, the head of RBS' investment bank, will today announce his departure from the company with a payoff of up to £700,000, The Times reports (£).

He would become the bank's most senior employee to lose his job over the Libor-fixing scandal.

Hourican was unaware of the rate-fixing activity but was in charge of the division responsible for it, according to the report.

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Vince Cable: It makes no sense to 'pass on the costs'

The Royal Bank of Scotland will announce how much it will be fined by the Financial Services Authority and US authorities for its role in the Libor rate-rigging scandal today.

Business secretary Vince Cable will today revive a plan to return the Royal Bank of Scotland to the private sector.

Speaking to ITV Daybreak he said if the country was to recover from the prolonged banks crisis, positive initiatives to get the banks lending again needs to be introduced.

Vince Cable 'to revive' RBS privatisation plan

The Business secretary Vince Cable will today revive a plan to return the Royal Bank of Scotland to the private sector, the Financial Times reports.

It comes as the bank prepares to announce a settlement with the UK's Financial Services Authority and US regulators.

Vince Cable is expected to urge the Chancellor to consider radical measure to privatise RBS.

According to the newspaper, Mr Cable will call for the Chancellor to consider radical measures to ensure the government's 82% stake in the bank is returned to private hands.

The measures would include a giveaway of free shares to the public.

Mr Cable is expected to say hope of privatising the bank “now looks a distant dream, unless at an unacceptable loss”.

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