November 6, 2013 / 2:01 PM / 5 years ago

Dutch finance minister calls for Rabobank prosecutions over Libor scandal

AMSTERDAM (Reuters) - Rabobank RABN.UL traders and bankers involved in an interest-rate rigging scandal should be prosecuted, Dutch Finance Minister Jeroen Dijsselbloem told a local broadcaster, acknowledging public anger over the bank’s conduct.

Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem listens during his meeting with the presidents from the Baltic states in Birini castle October 31, 2013. REUTERS/Ints Kalnins

Last month, U.S. and European regulators fined the Dutch cooperatively owned bank $1 billion for manipulating benchmark interest rates and its chief executive, Piet Moerland, resigned.

Rabobank said 30 staff were involved in “inappropriate conduct” relating to the London Interbank Offered Rate (Libor) and its Euribor cousin - benchmarks for more than $300 trillion of financial assets.

“You should not be allowed to get away with this type of fraud,” Dijsselbloem said in an interview with broadcaster RTL on Tuesday, adding that prosecutors should “take a hard look” at prosecuting those responsible.

“A lot of people don’t understand, myself included, that it’s possible to get away with this type of fraud and that’s the impression this gives.”

Rabobank, one of the three big retail banks in the Netherlands, is facing considerable public anger over the Libor scandal.

A survey published shortly after the fine showed Rabobank was no longer seen as the country’s most reliable bank and one in four customers were so outraged that they were considering moving their accounts to another lender.

Rabobank, which has said it was committed to “learning the lessons of the past”, has tightened systems and controls.

Of the 30 staff involved, 10 had already left the bank, five were fired with a sixth case pending, and 14 have been disciplined, a board member told Reuters.

Dijsselbloem plans to write to parliament about the Libor scandal to explain how it was possible the rate-fixing was not exposed earlier, despite early warnings at both the Dutch central bank (DNB) and Rabobank.

“The question is obviously why didn’t the bank, Rabobank, or the DNB act,” he said.

The central bank and Rabobank declined to comment on Dijsselbloem’s remarks.

Rabobank said last week it has launched a comprehensive package of measures to enhance compliance, reduce risk and improve culture.

In a letter to Rabobank in October, the central bank said the Libor investigation had initially appeared to be a matter for the markets regulator.

Reporting by Anthony Deutsch and Sara Webb; Editing by Erica Billingham

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