Royal Bank of Scotland, which is controlled by the British government, announced Wednesday, February, 6 that it would pay more than $600 million in fines, about 444 million euros, to the British and U.S. authorities for handling the Libor interbank rate, central in the world of finance.
In detail, the bank said it would pay £87.5 million (about $137.1 million) to the UK Financial Services Authority (FSA), $325 million to the U.S. agency responsible for regulating derivatives – Commodity Futures Trading Commission (CFTC), and $150 million to the U.S. Department of Justice “to end the investigation.” Question is whether the bank will plead guilty to embezzlement in a criminal investigation – an option that the management of RBS does not like.
After this settlement, the head of the investment banking arm of RBS, John Hourican, will leave the group even though he was not involved in the case. In total, 21 employees of the group took part in Libor manipulation, especially in yen and Swiss francs. RBS chairman, Philip Hampton said: “This is a sad day for RBS, but also an important one in continuing to put right the mistakes of the past. We have to fix the culture in the banking industry. The most important part of that is focusing our efforts on the needs of our customers and acting with integrity.”
The case of Libor rate handling erupted late June when the British bank Barclays revealed it would pay £290 million to end investigations by the UK and U.S. regulators. Swiss bank UBS was penalized late December a record fine of €1.1 billion.
Nearly twenty other large international banks are in the sight of the authorities, including in the United States, where fifteen institutions were subpoenaed, including JPMorgan, Citigroup, Barclays, UBS and Deutsche Bank. In France, the Paris prosecutor’s office opened a preliminary investigation after a complaint from a shareholder of Société Générale.
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