View more on these topics

Govt forces RBS to pay US Libor fines from bonuses

Greg Clark

The Government is forcing the Royal Bank of Scotland to meet the costs of US fines for Libor rigging from staff bonuses and pay.

RBS, which is 83 per cent owned by the Government, has been fined £87.5m by the FSA, £207m by the US Commodities and Futures Trading Commission and £95m by the US Department of Justice, bringing its total payable to £390m.

Under new rules the FSA fine money will go straight to the Treasury, after the regulator has taken enforcement costs.

Speaking to the House of Commons today in a statement on the RBS fine, Treasury financial secretary Greg Clark said the scandal is “extremely serious” and “motivated by greed”.

He said: “While it is right that RBS faces the full force of regulatory action in light of its conduct, the Government believes it would clearly be wrong for the taxpayer to foot the bill.

“In the case of US fines, I am insistent the taxpayer should not foot the bill. These fines must be met in full by past, present and future reductions of bonuses and pay of RBS.”

Democratic Unionist MP Sammy Wilson asked for assurances RBS will not recoup the lost bonus money by passing on customer charges in later years.

Clark said it is “absolutely essential” banks are “transparent” over where the money comes from.

Parliamentary Commission on Banking Standards member and Labour MP Andy Love hit out at the FSA for not being tough enough over the RBS fine.

He said: “The American regulators have imposed fines that are three times higher than the FSA and gives the appearance to be much more robust on their investigation of Libor and other issues.”

Clark also revealed the RBS fine money would be donated to armed forces charities as it did with £35m last year from a Barclays’ Libor rigging fine. He pledged to outline the specific details at a later date but promised it would be used as a “force for good”.

Clark also revealed former RBS’s head of its investment arm John Hourican, who quit the bank today over the scandal, gave up £5m in bonuses as a result.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm