RBS could receive higher fine than Barclays for rate-rigging

| August 24, 2012 | 0 Comments
RBS could receive higher fine than Barclays for rate-rigging

The Royal Bank of Scotland could be more heavily involved in inter-bank rate fixing than Barclays, an MP has suggested.

John Mann, a Labour MP on the Treasury select committee, speculated that RBS could receive a fine in excess of the £290 million incurred by Barclays, if the allegations prove true.

A source from within RBS recently said that internal procedures and checks at the bank were lax, potentially allowing anyone to change Libor (London Interbank Offered Rate), the interest rate at which banks can borrow funds from other banks in the London interbank market.

RBS says that it “continues to co-operate fully with ongoing investigations relating to the setting of Libor and other interest rates”.

The chancellor George Osborne, has been asked to explain the role of RBS in the scandal.

RBS is 82 per cent owned by the state and Mr Mann has suggested that the Government is likely to already know the scale of the fines faced by the bank and is failing to reveal the amount to parliament.

More than a dozen banks are under investigation in the UK, Europe and the US over allegations of Libor rate-rigging, which would have affected the cost of borrowing for customers.

Regulators in the UK are currently reviewing the way Libor rates are set with a view to reforming the process.

Meanwhile RBS has warned that costs of the Libor-investigation could affect its financial results.

In a statement the bank said: “The group is conducting a review of its policies, procedures and practices in respect of [US dollar payments] and has initiated discussions with UK and US authorities to discuss its historical compliance with applicable laws and regulations, including US economic sanctions regulations.”

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