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.
South Korea ferry: Vice principal rescued from sinking ship found hanged
Missing Malaysia Airlines Flight MH370: Wreckage could be found within a week as search reaches 'very critical juncture', says minister
Royal Tour 2014: Is the Duchess of Cambridge the only person ever to climb into a fighter jet wearing a dress and high heels?
Kim Jong-un, crowds and contraband: Inside North Korea with the Pyongyang marathon winner
Cover up! Mother told to show less cleavage during Disneyland family trip: 'Are we supposed to wear turtlenecks our whole lives?'
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
- 1 Pet cat puts three family members in hospital after launching frenzied attack
- 2 Dylan Tombides: West Ham confirm 20-year-old striker has died after battle with cancer
- 3 24 people applied for the 'world's toughest job', here are their interviews
- 4 Angus Steakhouse: How does tourist staple continue to thrive in today's gourmet market?
- 5 Cover up! Mother told to show less cleavage during Disneyland family trip: 'Are we supposed to wear turtlenecks our whole lives?'
iJobs Money & Business
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£221.25 per week: QA Apprenticeships: This company is a well established Inter...
£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...
£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...