The global rate-rigging scandal rocking the banking industry escalated yesterday as state-backed Royal Bank of Scotland suspended a trader for allegedly attempting to fix another key rate.
RBS has already warned that is likely to face a huge fine as it is sucked into the Libor-fixing scandal which cost Barclays £290m. But it emerged that the bank has suspended a trader in Singapore for allegedly trying to fix so-called dollar swap offered rates to benefit his position. Chong Wen Kuang is thought to be the first RBS employee to be suspended or fired for allegedly attempting to fix a rate other than Libor.
RBS fired four traders last year for rigging yen and Swiss franc Libor rates and suspended a further two, who have since been reinstated. A spokesman said investigations into the setting of Libor and other rates was "ongoing".
The Financial Services Authority has set out plans for an overhaul of the Libor system. Responsibility for publishing the rate will be stripped from the British Bankers' Association, while submitters will have to be approved by the FSA. The rate will be based on transactions rather than bank estimates of borrowing costs.