RBS wants to move on from Libor scandal

Tim Wallace
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STATE-BACKED bank RBS struck a two-year deferred prosecution deal with US authorities, admitting responsibility and paying an extra $100m (£63.8m) as one condition of the settlement agreed yesterday.

The bank’s Japanese arm pleaded guilty to one charge of wire fraud under the deal with the American Department of Justice (DoJ), while the deferral agreement with the parent group covers charges of wire fraud relating to Swiss Franc Libor and an antitrust violation on Yen Libor.

Traders did not fiddle US rates but some of the activity went through the US, giving the authorities power to fine the bank.

The wrongdoing took place from 2006 to 2010, two years after chief executive Stephen Hester took control. But he maintains senior managers and regulators were unaware at the time as they were more focused on preventing the giant institution from collapsing.

“We are also determined to correct the broad range of control and risk management failures that originated in RBS during the financial boom years. Libor manipulation is one example,” he said.

But Hester conceded it would be difficult to fully stamp out the cosy relationships in the sector: “In trading culture there was a mateyness, meeting in City bars,” he said.

“It is not a case of senior managers from different banks gathering around the table, but a risk of traders having discussions they shouldn’t.”