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RBS hit with £390m Libor fine

RBS Branch 480

The FSA and US regulators have fined The Royal Bank of Scotland a total of £390m for manipulating Libor.

The fine breaks down as £87.5m by the FSA, £207m by the US Commodities and Futures Trading Commission, and £95m by the US Department of Justice.

Between January 2006 and November 2010 RBS’ misconduct included making Japanese yen and Swiss franc Libor submissions that took into account its derivatives trading positions; allowing derivatives traders to act as substitute submitters; and making Japanese yen, Swiss France and US dollar Libor submissions that took into the profit and loss of its money market trading books.

RBS derivatives traders were also found to have colluded with other Libor panel banks and interdealer broker firms to influence the Japanese yen Libor submissions made by other banks.
The FSA says at least 219 requests for inappropriate submissions were documented, in addition to an “unquantifiable number” of oral requests. At least 21 RBS employees including derivatives and money market traders and at least one manager were involved.

The bank told the FSA in March 2011 that its Libor-related systems and controls were adequate.

FSA director of enforcement and financial crime Tracey McDermott says: “During the course of the FSA’s work on Libor, RBS provided the FSA with an attestation that its LIBOR related systems and controls were adequate. This was not correct. The FSA takes it very seriously when firms tell us they have appropriate systems but do not.

“The extent and nature of the misconduct relating to Libor has cast a shadow on the reputation of this industry and we expect firms to take steps to ensure that this can never happen again. This is the third penalty we have imposed in relation to Libor related misconduct. The size and scale of our continuing investigations remains significant.”

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. Hell mend them – their behaviour and that of other financial institutions in this country needs to be taken to task and never again should these institutions be given the opportunity of being able to bring a country or countries to their knee’s. And what about the clients that they screwed over in this manipulation what compensation will they receive in yet another mess created by so called sound financial institutions?

  2. And the taxpayer shall pick up the tab….

  3. how much was paid in bonus over the proceeding 10years? how much profit was made? how much will this cost the tax payer in the long run?

  4. Derek Bradley ceo Panacea Adviser 6th February 2013 at 1:38 pm

    Awesome taxpayer numbers, but who gets to “holding the folding”. and for what useful purpose will it be directed toward?

    I had thought that FSA fines were to go toward reducing the burden of regulatory fees.

    Perhaps a lesson would be learned if the banking licence was removed, but they are a bank and that would never do- would it?

  5. 100 million more than Barclays

    My My !! Hector was good value wasn’t he ?

  6. So the taxpayers bail out the bank, and then the taxpayers pay the fine, and no one lost their job? I need to change career.

  7. Well picked up DH @ 1:39pmn. We can bash bankers all we like but the very core of “bigger Business”, Regulation and Politic’s is corrupt.

    The list is endless Sants (or any senior management at the FSA), Goodwin, Blair (x2), every MP who fiddles their expenses, Starbucks, Goldman Sachs, Jimmy Carr, Chris Huhne.

    Great Britain used to be a country respected for a sense of honour and playing with a straight bat.

  8. HSBC launders Mexican drug money and Iranian bound funds (both criminal offences), RBS manipulates key interest rates and its insurance subsidiaries fraudulently alter complaint files. Nobody is banned and there have been no criminal prosecutions yet.

    Little IFAs with blameless records get thrown out for not passing exams because the FSA refuses to bring in a grandfathering rule.

    Proportionate? Fair? Reasonable? Defensible?

    Silly me – the banks provide jobs for ex FSA senior staff.

  9. Sorry forgot: according to the lunchtime news, the government is trying to persuade the bank that the money comes out of bankers’ bonuses, so the taxpayer won’t be hit.

  10. Has anyone of the fraudsters been subject to criminal proceeding? Has any one of the fraudsters had a note made in their FSA register regarding disciplinary proceeding? Has there been any claw back of past bonuses? Have the real perpetrators been brought to book? Have their names even been disclosed?

    Who is paying these fines? The poor shareholders who had no control over what happened, who have suffered losses on the their shares, and received no dividends for years, whilst those who got inflated bonuses because of mis-stated profits
    have taken the money. Their future bonuses may be reduced but then they just leave and find a new position elsewhere.

    Unless these bankers are subjected to real financial and criminal sanctions they will not change. What deterrent is there to amke them change their ways?

  11. Is there any attempt to relate this fine to the actual profits that were generated, over time, by such rate fixing? It seems like the fine could be quite a small amount relative to the gains made?

  12. @DH – Actually RBS is far lower than Barclays, the FSA has only fined them c.£70 million, the remainder is from foreign regulators.

  13. From Libor rigging to PPI insurance and everything in between. There is nothing that the financial services sells or provides that represents good value for the consumer; an industry not be trusted at any level.

  14. Ian that’s an infair generalisation. Say that to our widow client who now owns her ex-council house outright, or our client whose factory burned down and it was re-built courtesy of his insurers.

    You said “financial services,” but I think you mean “banks.”

  15. Hectors £3m pot seems great value for Barclays…..100m saving for Barclays.
    Why are Barclays fines a HEC of a lot lower than all the other comparable banks. Any ideas?

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