RBS could face criminal charges for rate-fixing
Taxpayer-owned bank in talks with US watchdogs to agree a settlement and is likely to have to pay a fine of £500m
Royal Bank of Scotland is facing criminal charges in the US over allegations its traders tried to fix Libor interest rates, it has emerged.
People with knowledge of settlement talks between the taxpayer-owned RBS and US watchdogs confirmed that the issue of the bank accepting a criminal charge – which would hit an Asian subsidiary – is what is holding up a deal.
It came as Britain's financial watchdog admitted that top bankers had escaped sanction for misdeeds during the financial crisis because it was "easier to get the little guys" under Britain's regulatory system.
RBS is likely to pay around £500m in fines, but sources said the scale of wrongdoing at the bank was more similar to that at Barclays, which paid £290m last year, than to that at Swiss bank UBS, which paid £900m in fines earlier this year.
Pleading guilty to a criminal charge could expose RBS to potentially huge civil claims in the American courts. The bank is facing further controversy over what could be a bonus pool of up to £250m for its investment bankers.
While the investment bank has been radically cut in size, paying bankers at a state-owned institution £250m in bonuses after a fine of £500m, and maybe more, is set to stoke public outrage at the City's bonus culture.
Effectively taxpayers, as the owners of RBS, will be paying the fine and the bonuses. RBS is only in business because the Government injected £45bn into the bank to shore up its finances during the financial crisis in 2008.
Campaigners described the situation as "a telling example of what's still wrong with the financial sector: we reward bankers for ripping us off, then foot the bill for the fines as well".
David Hillman, spokesperson for the Robin Hood Tax campaign, said: "Little has changed since the last financial crisis – the take-take-take mentality continues in the City. It's time the Government dragged banks back on the straight and narrow and made them give something back to society."
The anger is likely to be exacerbated by the admission by Tracey McDermott, head of enforcement at the Financial Services Authority, to the Parliamentary Commission on Banking Standards that it is easier to sanction junior staff who have committed offences rather than senior executives.
Only Peter Cummings, head of corporate banking at HBOS, has been sanctioned for playing a part in a bank's failure. He paid £500,000, but said he would have fought the sanction if he had the resources.
Andrew Tyrie, the chairman of the Commission, described the regulator's "approved persons regime" for top bankers as "a toothless tiger with respect to the senior executives". He added: "I've been told its easier to get at the little guys." Ms McDermott then said: "I would accept it is easier."
Lord McFall said: "The public interest, I would suggest, is not being served by the FSA. The FSA has been subservient to the interests of this industry."
But while Ms McDermott said the watchdog had "not been as effective as we want to be" she denied this was the case. "We have taken action against senior individuals at large firms. There are a relatively small number, despite us having focused on it quite hard."
She said there were "issues of fairness and of human rights" when it came to taking action against top bosses and that the FSA, or its successor the Financial Conduct Authority, should not be in the business of penalising bad business decisions.
The Independent understands that both RBS and the various regulatory agencies, are still hoping a settlement will be reached by early next week.
Several other banks will follow over the next 12 months.
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Missing Malaysia Airlines plane: Terrorism explanation 'cannot be ruled out', says CIA
Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Bad cattitude: Family call police after crazed and 'hostile cat with a history of violence' attacks baby before attempting to 'flee custody'
- 2 Family forced to flee home after discovering 'terrifying' nest of spiders in bananas
- 3 First Kiss: Filmmaker gets 20 strangers to make out on YouTube with awkward results
- 4 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 5 Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
iJobs Money & Business
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£60000 - £80000 per annum + BONUS + BENEFITS: Harrington Starr: A top, City ba...
VOLUNTARY ONLY - EXPENSES REIMBURSED : Reach Volunteering: Fantastic opportuni...