RBS facing fines over interest rate scam
London, November 26, 2012
Royal Bank of Scotland (RBS) is facing the increasing likelihood of having to settle separately with UK and US authorities investigating its involvement in the global interest rate-setting scandal, the Sunday Telegraph said.
The British newspaper said RBS is concerned it could receive a "double hit" of separate fines from the UK's Financial Services Authority and US authorities.
It had been hoping to agree a single collective deal, similar to the one agreed by Barclays, which became the first, and so far only, bank to settle with regulators over allegations that traders attempted to manipulate the setting of key inter-bank lending rates such as Libor, paying £290 million ($464m) in fines in June.
RBS said earlier it wanted to settle with regulators as soon as possible, enabling the part-nationalised bank to draw a line under the affair and continue with the recovery plan being led by chief executive Stephen Hester.
Hester warned earlier that the bank faces a "miserable day" when it is eventually punished and the danger of separate settlements is that the resulting negative publicity will be dragged out over a longer period of time.
Libor and other past mistakes are threatening to overshadow Hester's attempts to turn the bank around and get it into a shape that will make it possible for the government to start selling down the 81 per cent stake it acquired in rescuing the bank during the global financial crisis.
The bank was initially expected to settle the Libor case with regulators early in the fourth quarter. However, a report in October said a settlement had been delayed and was more likely at the end of 2012 or early next year because authorities around the world were working to competing agendas at different speeds.
The newspaper reported that settlements could come as early as next month. Hester said he expected details of a settlement to emerge between now and the bank's full year results in February.
More than a dozen banks are under investigation by regulators for suspected rigging of inter-bank rates used to price trillions of dollars worth of financial products.-Reuters