NatWest staff face sack over pounds 50m loss
Monday 10 March 1997
A spokesman for NatWest confirmed yesterday that the independent report into the "hole" in the department's trading book, which is being prepared by accountants Coopers & Lybrand and lawyers Linklaters & Paines, would be delivered later this week. He said the bank intended to take swift action over its contents.
The report is expected to be unequivocal and point to poor pricing of interest-rate options contracts offered by the options department, which went unnoticed and uncorrected over a 12-month period. The document is likely to blame incompetence and poor monitoring and controls rather than personal gain.
But City sources also expect the bank to take tough and prompt action to limit any damage to confidence in its activities and to placate the Bank of England, which will also see a copy of the report.
The disciplinary moves could involve the dismissal of two or three individuals held directly responsible for the losses and for failing to spot them earlier. Up to half a dozen others could be demoted or moved sideways and the departments involved, including the compliance and risk management departments as well as options trading, could be restructured.
Individual bonuses for 1996, some of which have been paid, will also be reassessed. NatWest declined to comment on whether some bonuses would have to be paid back.
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