RBS Hit With £390m Fine For Fixing Libor

Regulators have fined the taxpayer-owned bank a total of over £390m for rigging the Libor inter-bank rate.

Around £300m of this will be clawed back from its staff bonus pool.

RBS also confirmed that the head of its investment bank will step down, as revealed by Sky News.

John Hourican, who was brought in to rescue the business after it was bailed out in 2008, will forfeit around £4m in share options awarded to him based on past performance.

The Financial Services Authority (FSA) in the UK fined RBS a total of £87.5m for fixing Libor.

It said at least 21 individuals and one manager were involved in inappropriate conduct at the bank, and that it incorrectly said its Libor-related systems and controls were adequate in 2011.

In the US, the Commodity Futures Trading Commission (CFTC) ordered the bank to pay a penalty of over £207m and the Department for Justice fined the bank £96m.

RBS, which is 82%-taxpayer owned, is accused of attempting to manipulate the inter-bank lending rate as late as 2010 - with instances dating back to 2006.

The bank's chairman, Sir Philip Hampton, said it was a "sad day for RBS", but vowed to "put right the mistakes of the past".

Messages between bank employees, published by the CFTC, showed traders discussing fixing the rate.

One senior Yen trader wrote: "this libor setting is getting nutss (sic)."

Another message said: "its (sic) just amazing how libor fixing can make you that much money."

RBS is one of about 20 banks being investigated for manipulating Libor, the rate banks charge to lend one another.

It governs the price of more than $500trn (£320trn) worth of loans and transactions around the world, including mortgages.

The bank's fine is significantly higher than Barclays' £290m penalty, but less than UBS' settlement with regulators, worth almost £1bn.

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