RBS is expected to face heavier fines than Barclays didThe Royal Bank of Scotland is in negotiations with UK and US regulators over fines to be paid for its Libor transgressions, the BBC has learned.
BBC business editor Robert Peston says the talks include “other necessary remediation, including a possible senior resignation”.
He says the fines will run to several hundred million pounds, more than the £290m fines paid by Barclays.
Last month, UBS paid £940m in fines for attempted Libor rate manipulations.
Libor tracks the average rate at which the major international banks based in London lend money to each other.
RBS traders tried to manipulate the Libor interest-rate benchmarks for dollars, Swiss francs and yen, among others, according to a source.
“My understanding is that RBS believes its fines will be less than UBS’s,” says our editor.
“RBS is braced for substantial humiliation as and when the announcement is finally made. Emails from traders cited as evidence for the Libor rigging are particularly lurid, according to sources.”
He added: “Also, the market manipulation continued well into 2010, or long after RBS’s management was replaced at the end of 2008 following the collapse of the bank and its partial nationalisation. RBS’s board did not become aware of it till notified by regulators, in 2011.”
But our business editor says the bank’s board does not believe chief executive Stephen Hester needs to resign.
“No evidence has been found indicating that he knew about the attempt to make unfair profits by fixing the Libor rates; and he was fully occupied at the time trying to rebuild the banks’ shattered finances.”
It is understood that the FSA is arguing that some bonuses earned by executives and investment bankers should be repaid or clawed back.
But, says Robert Peston, this can only happen in relation to bonuses that were deferred.
“So at risk are those who were promised bonuses in 2009 and 2010, but haven’t yet received all their entitlement,” he added.