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.