The probes revealed ‘wrongdoing’ by 21 employees, mainly related to the setting of the bank’s yen and Swiss franc Libor submissions between October 2006 and November 2010
Royal Bank of Scotland, in which the British government has an 81% stake, agreed to pay fines amounting to $612 million to US and British regulators to settle allegations of Libor (London Interbank Offered Rate) interest rate rigging. RBS is the third bank to admit its role in the Libor affair after Barclays and UBS.
The probes revealed ‘wrongdoing’ by 21 employees, mainly related to the setting of the bank’s yen and Swiss franc Libor submissions between October 2006 and November 2010, the bank said.
Also read: Short-changing by international banks: Lessons for the banking fraternity and regulators
RBS added it had been fined $325 million by the US Commodity Futures Trading Commission, $150 million by the US Department of Justice (DoJ) and 87.5 million pounds by Britain’s Financial Services Authority.
The bank has also entered into a deferred prosecution agreement with the DoJ, in relation to one count of wire fraud relating to Swiss franc Libor and one count for an anti-trust violation relating to yen Libor.
RBS Securities Japan, an arm of the British bank, has agreed to enter a plea of guilty to one count of wire-fraud relating to Yen Libor, it added in the statement.
Japan’s Financial Services Agency said the Securities and Exchange Surveillance Commission has been investigating the local arm since mid-November for involvement in Libor manipulation.
Libor is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. Euribor is the Eurozone equivalent.
British finance minister George Osborne condemned the “totally unacceptable” behaviour at the bailed-out bank and insisted the taxpayer would not pick up the bill.
The Edinburgh-based lender, which was rescued by the UK government at the height of the global financial crisis, said that it would recoup about 300 million pounds from its staff bonus pool and by clawing back previous pay awards.
John Hourican, chief executive of the bank’s Markets and International Banking division, is expected to quit RBS and will forfeit his 2012 bonus and long-term incentive shares.
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