Rabobank fined £662m over Libor scandal as boss quits

Dutch Rabobank said today that it has agreed to pay around €774m (£662.77m) in fines, including £105m to the Financial Conduct Authority (FCA), for Libor-related misconduct.

The announcement comes with the news that Piet Moerland, the bank's chair, has resigned with immediate effect.

The fines, imposed by various Dutch, UK and US authorities, follow the involvement of 30 employees in "inappropriate conduct", said the bank.

The FCA's fine is the third largest ever given by the regulator and the fifth penalty for failures relating to the London Interbank Offered Rate (Libor).

The bank's poor internal controls, says the regulator, allowed for systematic attempts and benchmark manipulation which it didn't deal with until August of this year, despite assuring the FCA in March 2011 that the right arrangements were in place.

Tracey McDermott, the FCA’s director of enforcement and financial crime said, "the misconduct is among the most serious we have identified on LIBOR. Traders and submitters treated LIBOR submissions as a potential way to make money, with no regard for the integrity of the market."

The collusion that emanated from Rabobank meant that its Libor submissions and those made by other panel banks didn't fairly reflect the cost of inter-bank borrowing, undermining the overall integrity of Libor.

The lender says that top management was neither involved nor aware of the misconduct, and it didn't appreciate the risks involved with the submission processes. It has now launched measures to enhance compliance and improve its culture, having already taken steps to strengthen systems and controls relating to its interest rate benchmark submission.

In June of 2012, Barclays was £59.5m by the FCA for misconduct relating to Libor and Euribor. UBS AG was fined £160m for similar failings in February of this year.