Business, Economics and Jobs

Royal Bank of Scotland may get $803 million LIBOR fine


This picture shows the Royal Bank of Scotland sign outside a branch in central London.



The Royal Bank of Scotland (RBS) may face up to $803 in fines for it's part in the London Interbank Offered Rate scandal that shook the London banking industry and international business world last year.

Speaking to anonymous sources, Reuters claimed "sources familiar with the matter" said RBS is likely to comply with the fine, which Barclays bank did last June with a fine of $450 million.

John Hourican, RBS investment banking chief, and Peter Nielsen, head of markets, may, according to Bloomberg news, be asked to resign due to their alleged part in the scandal in which bankers manipulated rates, inflating or deflating them so they could profit from trades. 

UBS AG bank was fined $1.5 billion in December, the largest LIBOR fine yet levied.

Last week BBC business editor Robert Peston said RBS was prepared for the fine and its attendant public humiliation.

"RBS is braced for substantial humiliation as and when the announcement is finally made. Emails from traders cited as evidence for the Libor rigging are particularly lurid, according to sources," the BBC reported.

When asked to put in context the size of the LIBOR scandal, Andrew Lo, a professor of finance at the Massachusetts Institute of Technology, said, "This dwarfs by orders of magnitude any financial scams in the history of markets."