Osborne warns bankers Libor fines will come out of bonuses

Royal Bank of Scotland braced for huge fine

George Osborne's staff claim the chancellor has "laid down the law" to bankers, saying that fines for the Libor rate-rigging scandal must come out of their bonuses.

State-backed Royal Bank of Scotland (RBS) is braced for a huge fine from American regulators, as it becomes the third bank to settle over its traders’ role in the scandal.

The Government still owns four fifths of the bank, saved from collapse by a £45bn bailout four years ago, in the wake of the ill-advised acquisition of Dutch bank ABN Amro.

Senior RBS figures were warned that leaving taxpayers to cover the US penalty for the bank's role in fixing the lending rate, which governs the price of more than $500 trillion-worth of loans and transactions around the world, would be "totally unacceptable".

RBS is rumoured to be preparing to hold back on some perks in preparation for the fines, and is thought to be close to reaching a deal with regulators in Britain, America, Japan and Singapore. It faces a total fine of £350 million.

A senior Treasury source said: "Fixing the Libor market is a symbol of all that went wrong with the banking system over the past 10 years. We are now putting those things right.

"Ahead of any other country, we legislated to make abuse of the system a criminal offence and are stripping the banks of the power to administer it themselves.

"The authorities are rightly pursuing those individuals who abused the system; and the regulators are rightly fining the banks they worked for.

"We all know there are Libor investigations ongoing into RBS in both the UK and the US. Any UK fine will already go to the public, and the Chancellor has made it clear that on this occasion the bill for any US fine should be paid for by the bankers, and not the taxpayer."

Last year Barclays was fined a total of £290 million, of which £58.5 million was in the UK, while UBS was hit by a global fine of £940 million, including a £160 million UK penalty.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Metail Ltd: Business Development Manager for Asia Pacific

£35,000 - £40,000 based on experience : Metail Ltd: As a Business Development ...

Guru Careers: Product Manager / Product Owner

£30 - 40k (DOE) + Bonus & Benefits: Guru Careers: A Product Manager / Product ...

Recruitment Genius: Sales Executive

£16000 - £17000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Car Sales Executive - £17,000 Basic, OTE Uncapped

£17000 - £27000 per annum: Recruitment Genius: The Company are looking for a S...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate