James Moore: Mixed messages to the world's biggest banks

Outlook It seems increasingly likely that Royal Bank of Scotland will be doing its metaphorical "perp walk" within the next couple of weeks. At the end of it, there'll be an $800m (£500m) fine for its role in the Libor fixing affair, the lion's share of which will be handed to US taxpayers. I understand that Britain's Financial Services Authority may account for just £100m of the total.

The FSA, of course, will effectively be fining the taxpayer, because the taxpayer owns RBS. Because George Osborne is planning legislation to ensure that any fines imposed on banks go into government coffers – they used to be used to reduce the fees of other regulated firms – it's all swings and roundabouts really.

You might then think that, as far as the FSA's part of the fine goes, it's all rather pointless. But the watchdog can hardly be seen to let the bank of the hook. It would send out a very bad message if it did. RBS is a regulated firm that allowed its traders to cheat. It has to be punished, and levying a fine is the only option open to the FSA. It needs the message to be heard by its other "home" banks.

In that context, the attitude displayed by US regulators to their "home" banks is interesting. What the trader known as the "London Whale" got up to at JP Morgan was a long way from the sort of out and out cheating indulged in by the City's network of Libor traders. But it was still pretty appalling. The Whale was allowed to build up such an enormous position in derivatives that London's hedge funds were queueing up to attack it. It was so big, they'd have needed to be half asleep to miss it, and JP lost billions.

The bank was lambasted for deficient governance, ineffective internal audit processes and inadequate management of its financial models. Senior management were accused of failing to provide adequate information to directors.

And the bank's punishment? There will be no metaphorical perp walk, and no fine at the end of it. JP was told to sharpen up its procedures and then sent to the naughty step.

One might ask what sort of message America's financial watchdogs are sending out to their "home" firms with that.

Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits