Newsuk newsuk businessUK banks

RBS Avoids £87m Fine By Blowing Whistle On Libor-Rigging Cartel

Here's How RBS Just Avoided Being Fined £87 Million
The Huffington Post/PA
|
Open Image Modal
Protesters outside the RBS (Royal Bank of Scotland) annual general meeting in Gogarburn, Scotland, as The World Development Movement call on the bank to stop investing in coal mining.
Danny Lawson/PA Wire

Royal Bank of Scotland has avoided a multi-million pound fine from the European Commission after it blew the whistle on a cartel to rig the Swiss franc Libor rate.

The bank admitted it acted alongside JP Morgan in distorting the pricing of interest rate derivatives between March 2008 and July 2009.

They have agreed to settle the case with the Commission, resulting in a fine of 61.7 million euros (£48.6 million) for JP Morgan but immunity for RBS as it had revealed the existence of the cartel. The penalty for the taxpayer-backed bank would have been 110 million euros (£87 million).

The Commission also imposed fines of 32.3 million euros (£25.5 million) on JP Morgan, UBS and Credit Suisse after the banks and RBS were found to have agreed an element of the pricing on certain Swiss franc derivatives.

The Commission said this allowed the banks to flout the market at their competitors' expense.

In December, RBS was among eight banks to agree penalties with the European Commission over allegations they formed cartels to fix two key benchmark interest rates.

It paid 391 million euros (£325 million) for its role in the attempted rigging of the Yen Libor and Euribor - the Tokyo and euro area equivalents of the London interbank offered rate (Libor).

In February 2013 RBS agreed settlements worth £391 million with regulators in the UK and United States over its role in the Libor rate-rigging scandal.

Commission vice-president in charge of competition policy Joaquin Almunia said today's settlement was the third case where the Commission has identified a cartel related to the manipulation of a financial benchmark in which major banks colluded instead of competing with each other.

He added: "Our economy needs a healthy, transparent, well-functioning financial sector. This is why antitrust rules in this sector must be strictly enforced."

The bank said: "RBS condemn the behaviour by a small number of employees identified in today's announcement by the European Commission.

"These offences were unacceptable and have no place in the RBS we are building. Once they were uncovered management took swift action to notify our European competition regulator with the aim of quickly resolving this matter."

See more...

RBS Boss Fears Borrowers Not Ready For Interest Rate Rises

Mark Carney Tears Into Bad Bankers For 'Getting Away With It'

MPs Ask Bankers To Prove They Are Regulated Too Much

Bankers Must Cope With New Rules Or Leave, Labour Warns

Bank Of England Deputy Urges Better Global Rules To Stop Another Crash

See also:

Reasons Why The Banks Aren't Yet In Order
Barely Anyone Thinks Banks Are Well Run(01 of07)
Open Image Modal
Just 19% of people think banks are competently managed.
They're Still Not Lending To Businesses (02 of07)
Open Image Modal
The big banks have been battling to get money out of the door to help British SMEs but are still struggling as business lending has fallen in most parts of Britain. An investigation by Lawrence Tomlinson, the business department's entrepreneurial adviser, found that government-owned banks were "crucifying" firms in the way they managed their financial support.
PPI Mis-selling Drags On(03 of07)
Open Image Modal
Banks are still paying out millions for mis-sold payment protection insurance.This has led to a peak in complaints too.
Credit Card Theft Insurance Mis-selling Surfaces(04 of07)
Open Image Modal
Over a dozen high street banks and credit card firms have agreed on a compensation fund of more than £1 billion for potentially for seven million people who had been mis-sold credit card and identity theft protection.It all stems from card insurance policies supplied by York-based CPP Group.
Was There Gilt-Rigging?(05 of07)
Open Image Modal
Did the Bank of England miss an attempt by traders to rig the gilt market too? Tory MP Andrea Leadsom thinks so.Financial regulators are investigating. Meanwhile one of the Bank officials said such an attempt at a dodgy trade would be "reprehensible" if proven.
Bank Bonuses Are On The Up (06 of07)
Open Image Modal
Banker bonuses effectively increased by 4% over last year to £38.6 billion, after banks deferred bonuses to take advantage of George Osborne's 50p income tax rate coming in.Osborne's introduction of the lower 45p income tax band, announced in his Budget last year means that the taxpayer lost out on an estimated £85 million as banks deferred £700 million of bonuses to April this year.Also, we have three times more millionaire bankers than the rest of the EU combined.
Oh Yes, And The Libor Rigging (07 of07)
Open Image Modal
Regulators are still looking into the Libor interbank fixing scandal, bringing charges against traders they have managed to single out.
Suggest a correction
|
Submit a tip