The Royal Bank of Scotland (RBS) has agreed to a $612 million settlement with U.S. and U.K. authorities over charges that it manipulated the London Interbank Offered Rate (LIBOR).
The New York Times reports that RBS' Japanese subsidiary also pleaded guilty to criminal wrongdoing in a settlement with the U.S. Department of Justice. The RBS settlement is the second largest LIBOR-related fine levied against a financial institution.
‘The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank's LIBOR submissions, trying to manufacture winning trades. That's what happened at RBS,’ said David Meister, enforcement director of the U.S. Commodity Futures Trading Commission, in a press statement.
Stephen Hester, CEO at RBS, expressed remorse for the bank's role in the LIBOR manipulation.
‘We condemn the behavior of the individuals who sought to influence some LIBOR currency settings at our bank from 2006 to 2010,’ said Hester in a statement. ‘There is no place at RBS for such behavior. LIBOR manipulation is an extreme example of a selfish and self-serving culture that took hold in parts of the banking industry during the financial boom.’