The Royal Bank of Scotland has been ordered to pay £390m by UK and US regulators for its part in manipulating the London Interbank Offered Rate.
Following the bank’s manipulation of Libor, it has received fines of £87.5m from the Financial Services Authority, $325m (£207.6m) from the US Commodity Futures Trading Commission and £97m from the US Department of Justice.
This is the third fine issued by the FSA in relation to the Libor rigging scandal. Barclays received a £60m fine in June last year (27 June), which was at the time the largest-ever fine from the UK regulator. However, the FSA then broke its own record when it fined Swiss banking group UBS £160m later that year (19 December).
Philip Hampton, chairman of RBS, said: “The RBS board acknowledges that there were serious shortcomings in our systems and controls and also in the integrity of a small group of our employees. This is a sad day for RBS, but also an important one in continuing to put right the mistakes of the past.
“Although this wrongdoing went undetected for longer than we would have wished, in this and across all risk areas we are working hard to root out bad practices and put them right for the future. This process has no short cuts but does have our full attention.”
Tracey McDermott, director of enforcement and financial crime at the FSA, said: “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.
“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.”
David Meister, director of enforcement for the CFTC, added: “The integrity of Libor depends on truthful information provided by a select group of some of the world’s most important banks.
“The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank’s Libor submissions, trying to manufacture winning trades. That’s what happened at RBS.”
