Notes on a scandal

Tim Wallace
Follow Tim
RBS took a £390m fine for Libor fiddling yesterday after watchdogs found that 21 staff had colluded with rivals over four years to fix the key market interest rates for the benefit of their own financial positions.

Traders offered each other steaks and sushi in exchange for entering false interest rates to drive the Japanese yen and Swiss franc interest rates up and down for their own gain.

Investigators found almost 100 written requests for rates to be fixed, including instant messages boasting of the money made from the scheme.

Yesterday RBS was fined £87.5m by the UK’s Financial Services Authority, $325m (£207.6m) by the US Commodity Futures Trading Commission and $150m by the US Department of Justice.

Investment bank chief John Hourican also lost his job, forfeiting £4m in bonuses and shares despite not being involved with or aware of the Libor fiddling.

The majority of the staff involved in or aware of the scam have been fired or have resigned. A handful of staff who were peripherally involved remain. The fine is above the £290m paid by Barclays but below UBS’s $1.5bn, in part because RBS did not push down rates to falsely flatter the bank’s position during the credit crunch.

■ The instant messages RBS traders sent as they rigged Libor

15 September 2009
Yen Trader 1: can we lower our fixings today please [Primary Submitter]

Primary Submitter: make your mind up[,] haha, yes no probs

Yen Trader 1: im like a whores drawers

5 December 2007
Yen Trader 2: FYI libors higher again today [...]

YenTrader4: 'ucksake. keep ours low if poss. don't understand why needs to go up in yen

Yen Trader 2: no reason dude[,] [Bank C] and [Bank D] went high yest

Yen Trader 4: send the boys round […]

Yen Manager: pure manipulation going on

20 August 2007
Senior Yen Trader: this libor setting is getting nutss

Bank A Trader: im puzzled as to why 3m libor fixing not coming off after the FED action […]

Bank B Trader: [UBS] is lending dolls through my currencies in 3 month do u see him doing the same in urs […]

Senior Yen Trader: yes[,] he always led usd in my mkt[,] the jpy libor is a cartel now [..]

Senior Yen Trader: its just amazing how libor fixing can make you that much money […]

Senior Yen Trader: its a cartel now in london[.] they smack all the 1yr irs ..and fix it very high or low

4 December 2008
Swiss Franc Trader: can u put 6m swiss libor in low pis?

Primary Submitter: NO

Swiss Franc Trader: should have pushed the door harder

Primary Submitter: Whats it worth

Swiss Franc Trader: ive got some sushi rolls from yesterday? [...]

Primary Submitter: ok low 6m , just for u

Swiss Franc Trader: wooooooohooooooo[,] 0.01 %? thatd be awesome

Primary Submitter: 1.33

Swiss Franc Trader: perfect u r a nice man

14 May 2009
Swiss Franc Trader: pls can we get super high 3m super low 6m. PRETTY PLEASE!

Primary Submitter: 41 & 51

Swiss Franc Trader: if u did that[,] i would lvoe [sic] u forever

Primary Submitter: 41&55 then...

Swiss Franc Trader: if u did that i would come over there and make love to you[,] your choice

Primary Submitter: 41+51 it is

22 November 2010
Senior Yen Trader: hey think we be able to convince [Primary Submitter] to change the libor today?

Yen Trader 1: i can try

Senior Yen Trader: need to drop 3mth Libor and hike 6m Libor he dropped 6m by 2 bps last Friday

Yen Trader 1: at the moment the FED are all over us about libors

Senior Yen Trader: thats for the USD?

Yen Trader 1: yes

Senior Yen Trader: dun think anyone cares the JPY libor

Yen Trader 1: not yet[,] i will walk over ot [sic] them

25 November 2010 (audio recording)
Primary submitter: Morning, [Senior Yen Trader]? Hi, [Primary Submitter].

Senior Yen Trader: Yeah, how are you?

Primary submitter: I'm pretty good sir. Very Good. We're just not, we're not allowed to have those conversations on [instant messages].

Senior Yen Trader: Oh, sorry about that. I didn't know. (laughter)

Primary Submitter: (laughter)

Senior Yen Trader: Oh because of the, the BBA thing?

Primary Submitter: Yes, exactly.

Senior Yen Trader: ah, ok ok. So yeah, leave it with me, and uh, it won't be a problem.