The Dutch lender Rabobank has agreed to pay $1.07bn (£670m) to regulators around the globe over its role in the Libor-rigging scandal.
Its chief executive, Piet Moerland, also resigned with immediate effect yesterday, saying: "I want to send a very clear signal – a sincere apology and strong condemnation of these inappropriate acts. I have decided to resign. It's a matter of principle for me."
Rabobank said 30 of its employees "were in some way involved in inappropriate conduct" and that a number had been sacked and others fined.
The bank, which is co-operative, largely devoted to lending to tulip growers and cheesemakers, said that the executive board members, even though they had no knowledge of the rate-fixing, had volunteered to give up a total of €2m (£1.7m) in pay.
Rabobank now becomes the fifth bank to settle Libor-rigging cases. So far, Barclays, Royal Bank of Scotland, Icap and UBS have paid $2.9bn in total to regulators over the scandal.
At least 10 other major banks are still being investigated over alleged Libor manipulation, including Deutsche, which yesterday said it could face significant financial penalities from regulatory inquiries and was putting aside an extra €1.2bn to cover potential litigation costs. The charge knocked the German banking giant's quarterly profits back 94 per cent to just €18m.
The Swiss banking group UBS, meanwhile, warned that it would not hit its target of a 15 per cent return on capital by 2015 because it had been ordered to increase the amount of capital it holds against litigation risk by its local banking regulators. It has already reached a settlement over Libor with regulators, but is now one of the banks being investigated over the possible rigging of the foreign exchange markets.
The lion's share of the Rabobank fines go to the US ($800m), with €70m to the Dutch authorities, while London's Financial Conduct Authority fined it £105m. That is the third-highest ever fine by the FCA or its predecessor, the FSA.
Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Rabobank's misconduct is among the most serious we have identified on Libor. Traders and submitters treated Libor submissions as a potential way to make money, with no regard for the integrity of the market."
The regulators detailed exchanges between Rabobank's traders and Libor settlers conspiring to fix rates. In one message, a yen Libor settler said: "Don't worry mate – there's bigger crooks in the market than us guys!"
A message from the money markets desk head in London said: "I am fast turning into your Libor bitch!!!!" The trader replied: "Just friendly encouragement that's all, appreciate the help." The money markets desk head wrote back: "No worries mate, glad to help … We just stuffed ourselves with good ol pie, mash n licker!!"
Wout Dekker, the Rabobank chairman, said: "I am deeply disappointed that a number of Rabobank employees engaged in unacceptable conduct and that our systems and controls were not sufficient to prevent this."
Top five: Libor fines
UBS $1.5bn, 2012
Rabobank $1.07bn, 2013
RBS $612m, 2013
Barclays $451m, 2012
Icap $87m, 2013
Source: ReutersReuse content