RBS next to be fined in rate-rigging scandal, says report
The Times reports that the taxpayer-backed bank may face a £150m fine
By CFOWorld staff | CFO UK | Published 10:03, 29 June 12
Royal Bank of Scotland may be next in line to be hit with a hefty fine by regulators for attempting to fix market interest rates as Barclays saw its shares plummet on Thursday after politicians waded into the debacle.
The part-nationalised bank may face a fine of £150 million, according to The Times, for the same interest rate rigging scandal that put Barclays chief executive Bob Diamond in the firing line.
RBS said it, like many others, is continuing to co-operate with regulators on the ongoing investigation. Any resolution of its case is months away, a person familiar with the matter said.
The Libor mis-selling scandal is expected to draw in many banks globally, but Diamond has found himself first in the firing line after US and UK authorities fined Barclays $450 million on Wednesday for manipulating the London interbank offer rate (Libor).
Prime minister David Cameron said Diamond - who was running the investment banking arm Barclays Capital when the rigging occurred in 2005-2009 - and other bosses had some "big questions to answer". Britain also called in the fraud squad to investigate possible crimes.
Banking woes deepened on Friday as the Financial Services Authority said it had settled with four banks - Barclays, RBS, HSBC and Lloyds - after finding evidence they mis-sold products to protect small businesses against a rise in interest rates.
Compensation could run into the hundreds of millions of pounds, lawyers have said, although Lloyds said the cost for it would not be material.
A string of mis-selling cases has rocked the financial services industry for over two decades and banks are already likely to pay upwards of £9 billion in compensation for mis-selling loan insurance.
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