RBS fined £390m for ‘widespread misconduct’ over Libor

UK bank RBS has been fined a collective £391m for its role in the Libor scandal, with the UK FSA’s investigation finding over 200 “inappropriate” rate submissions.

The fines, made up of an £87.5m UK FSA fine and over £300m in US penalties, relate to “widespread” misconduct at the bank in its attempts to manipulate the London Interbank Offered Rate.

“RBS established a business model that sat derivatives traders next to Libor submitters and encouraged the two groups to communicate without restriction despite the obvious risk that derivatives traders would seek to influence RBS’ Libor submissions,” the FSA said in a statement.

“The integrity of benchmark reference rates such as Libor is of fundamental importance to both UK and international financial markets. The findings set out in our notice today demonstrate a failure by RBS to take that wider context into account,” said FSA enforcement director Tracey McDermott.

“The failures at RBS were all the more serious because of the attempts not only to influence the submissions of RBS but also of other panel banks and the use of interdealer brokers to do this.”

“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.”

The penalties follow on from UK bank Barclays’ cumulative £290m penalty for Libor fixing levied last summer.

That fine resulted in wholesale changes at the board of the bank. New CEO Antony Jenkins is expected to outline the bank’s transformation strategy at an investor day on 12 February.


This article was first published on Investment Week

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