7 Feb 2013

The Libor saga continues with the news that RBS has been fined £390 million by the Financial Services Authority, US Commodity Futures Trading Commission and the US Department of Justice in relation to the setting of the bank’s Yen and Swiss Franc Libor submissions. The joint investigation found that 21 RBS employees were involved in the collusion with other banks and brokers in making and receiving requests for higher and lower Libor submissions which, in turn, helped the profitability of swaps positions held by the bank. All 21 wrongdoers are said to have left RBS or been subject to disciplinary action. The fine follows those imposed upon Barclays and UBS last year.

With five other financial institutions and a number of individuals still under investigation, together with the launch of a criminal inquiry by the Serious Fraud Office, this announcement is likely to be the tip of the iceberg and a long running, exhaustive investigation by the regulators into this global scandal. The news however is unlikely to appease the growing public opinion both here and abroad that individuals responsible for the scandal must face prosecution. It remains to be seen when or indeed whether that will be the case. In any event, with the outcome of the Wheatley Review and the recent publication of the FSA’s consultation paper, Libor submissions will no doubt be a regular feature in the headlines over the course of this year.

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