RBS admits a large fine for rate fixing may be on the way soon

Tim Wallace
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RBS, the majority government-owned bank, is being investigated by the Financial Services Authority (FSA) over the Libor scandal, boss Steven Hester admitted yesterday.

It comes a month after Barclays was fined £290m for manipulating the market by entering false rates.

“RBS is one of the banks tied up in Libor. We’ll have our day in that particular spotlight as well,” Hester told the Guardian, explaining that the scandal will be bad for perceptions of the whole industry.

The bank’s reputation has also been hit by systems outages, which he believes were avoidable.

“RBS has seen a big mushrooming in spending on technology. With hindsight maybe a bit more of that should have been in the core systems that work every day,” said the chief executive.

The bank also reportedly paid a businessman £25m to settle an interest rate swap mis-selling case, highlighting another potentially major cost that could be revealed with the bank’s half-year results at the end of this week.