'We could face Libor fines,' admits RBS chief

 

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The Independent Online

The Royal Bank of Scotland chief executive, Stephen Hester, last night warned that the bank will have its "day in the spotlight" over the Libor scandal and could face fines similar in size to those imposed on Barclays.

Mr Hester, pictured, confirmed that the taxpayer-backed bank was currently being probed as part of the Financial Services Authority investigation into Libor-rigging.

Barclays was fined £290m and lost three senior executives after admitting its staff had submitted artificially low figures.

"RBS is one of the banks tied-up in Libor. We'll have our day in that particular spotlight as well," Mr Hester said in an interview with The Guardian.

He added: "Even though when all the Libor [fines] are out most of it is going to be around the wrongdoings of a handful of people at a number of banks. Those wrongdoings taint the whole industry beyond the handful of people and that makes it a huge problem."

Meanwhile, it was reported last night that HSBC is to put aside more than £600m to cover the cost of recent banking scandals, including £300m for the mis-selling of payment protection insurance and £200m for mis-selling interest rate swaps to small businesses.

In the interview Mr Hester showed little sympathy for Bob Diamond, the Barclays boss who was forced out by regulators in the wake of the Libor scandal.

Mr Hester said bank bosses had to live with the idea of "professional mortality" and chief executive jobs brought with them insecurity. He has already waived his bonus for 2012 following the outcry over the £1m he was due to receive for 2011. He said the political and public reaction to the figure announced in January had "caught everyone on the hop". He added: "Let's set aside if it was fair or not, in this case I thought we… had fallen down on the job."

The Libor admission follows a computer meltdown at RBS when up to 13 million customers could not access their accounts to up to a month.

Mr Hester said the situation might have been avoided if more had been spent on upgrading existing computer systems "RBS has seen a big mushrooming in spending on technology. With hindsight maybe a bit more of that increase should have been in the core taken-for-granted systems that work every day."

Stephen Hester joined RBS in November 2008 following the departure of chief executive Fred Goodwin, whose aggressive expansion policies were blamed for leading to the bank's nationalistaion.

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