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RBS fined $612 million for rate rigging

Wednesday, Feb 06, 2013 - 02:19

Feb. 6 - British state-owned bank Royal Bank of Scotland has to pay US and UK regulators around $612 million for its role in the Libor interest-rate rigging scandal. CEO Stephen Hester avoided a political firestorm by saying the bank's profits would be used to pay the fines. Joanna Partridge reports.

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612 million dollars. The fine Royal Bank of Scotland has to pay US and UK regulators for its role in the Libor interest rate-rigging scandal. More than a dozen traders in the UK, US and Asia manipulated the loan pricing rate from at least 2006 until 2010. The head of RBS' investment bank John Hourican agreed to leave after the misconduct of staff was uncovered. And RBS was only able to keep its US banking license by promising not to step out of line again. It's yet more embarrassment for RBS which had to be bailed out by British taxpayers in 2008. Stephen Hester is the CEO - he was brought in the clean up the bank. SOUNDBITE: Stephen Hester, RBS CEO, saying (English): "We are and I am hugely disgusted by this and hugely disappointed. The wrongdoing of 20 people in this institution is no excuse that it was also across the industry. It is unacceptable there's no place in our industry for it. And worse than that in many respects, the culture of selfishness, of self-serving." To avoid a political row Hester said most of the money for the fines would come from the bank's profits. Edward Hadas from Reuters Breaking Views says the penalties could have been worse. SOUNDBITE: Edward Hadas, Economics Editor, Reuters Breaking Views, saying (English): "I think the banks are getting off lightly, because I think this really suggests an industry which was in very bad moral, ethical condition and to pay a few fines and to say yes, yes, we'll do much better, doesn't really quite get to the depth of the problem of how you could allow this to happen." RBS's fine is the second-largest in the Libor scandal, which has also hit Barclays and UBS. The international investigation involving over a dozen banks continues. Britain's Business Minister Vince Cable says he wants RBS to get lending to the real economy. SOUNDBITE: Vince Cable, British Business Minister, saying (English): "It's very clear that a lot of sensible sorting out is taking place, and identifying good assets and bad assets and making them work." Earlier this week the UK government announced plans to separate retail banking from riskier investment activities. Many say numerous banking scandals only confirm the need for such action.

RBS fined $612 million for rate rigging

Wednesday, Feb 06, 2013 - 02:19

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