NEWS
01/07/2012 06:58 BST | Updated 31/08/2012 06:12 BST

RBS Sacks Ten Traders Over Libor-Fixing Scandal

Royal Bank of Scotland has sacked 10 of its traders over their alleged role in the Libor-fixing scandal.

The revelation comes after the bank confirmed it is being investigated for manipulating the rates at which banks lend to each other.

The date on which the traders were removed from their posts is not known.

RBS has not commented on the sackings.

Lord Turner, chairman of the Financial Services Authority, said there had already been "significant steps" to prevent the Libor scandal happening again and that he did not believe similar behaviour was taking place now.

But he said the malpractice was not covered by criminal law.

"I think people are justifiably angry at some of the practices that were present in particular in the run-up to the financial crisis in 2008," Lord Turner told BBC1's Andrew Marr Show.

"The situation on the law is that we have looked very carefully at what types of cases we are able to bring, and in this particular case of Libor, because it is not a qualifying instrument under the Act, it is not covered by the criminal law.

"We have therefore brought the maximum cases we can bring under our own powers for breaches of our principles."

Mr Cable later said the public wanted to see bankers prosecuted if they committed criminal offences.

He told Sky News' Murnaghan programme: "They just can't understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like a conspiracy."

Meanwhile, more details emerged today of the £290 million fine meted out to Barclays by UK and US regulators for manipulating the rate at which banks lend to each other.

A statement published on the FBI's website said Barclays had agreed to pay the Department of Justice £100 million.

It added: "According to the agreement, between 2005 and 2007, and then occasionally thereafter through 2009, certain Barclays traders requested that the Barclays Libor and Euribor submitters contribute rates that would benefit the financial positions held by those traders.

"The requests were made by traders in New York and London, via electronic messages, telephone conversations, and in-person conversations.

"The employees responsible for the Libor and Euribor submissions accommodated those requests on numerous occasions in submitting the bank's contributions. On some occasions, Barclays' submissions affected the fixed rates.

"In addition, between August 2005 and May 2008, certain Barclays traders communicated with traders at other financial institutions, including other banks on the Libor and Euribor panels, to request Libor and Euribor submissions that would be favourable to their or their counterparts' trading positions, according to the agreement.

"When the requests of traders for favourable Libor and Euribor submissions were taken into account by the rate submitters, Barclays' rate submissions were false and misleading.

"Further, according to the agreement, between approximately August 2007 and January 2009, in response to initial and ongoing press speculation that Barclays' high US dollar Libor submissions at the time might reflect liquidity problems at Barclays, members of Barclays management directed that Barclays' dollar Libor submissions be lowered.

"This management instruction often resulted in Barclays' submission of false rates that did not reflect its perceived cost of obtaining interbank funds.

"While the purpose of this particular conduct was to influence Barclays' rate submissions, as opposed to the resulting fixes, there were some occasions when Barclays' submissions affected the fixed rates."