RBS could be fined $783 million in interest rate case
LONDON — Royal Bank of Scotland is poised to be fined between $625 million and $783 million for manipulating interest rates, the second-biggest penalty imposed in a global probe by regulators, two people with knowledge of the matter said.
An announcement may be made as soon as Wednesday, said the people, who requested anonymity because they weren't authorized to speak publicly. An RBS unit will plead guilty to criminal charges as part of a deal with the U.S. Justice Department, a person familiar with the talks said. It's the third fine to result from a probe into whether lenders rigged the London interbank offered rate, or Libor.
Investment banking chief John Hourican is expected to resign, the people said.
The Scottish bank owns RBS Citizens Financial Group, the parent of RBS Citizens Bank of Pennsylvania. RBS Citizens created the Pennsylvania bank from its 2001 acquisition of the former Mellon Financial Corp.'s retail bank franchise.
The penalty is the biggest blow to Chief Executive Officer Stephen Hester's attempt to overhaul the Edinburgh-based bank after it took a 2008 taxpayer bailout. The fine would exceed the one Barclays Plc paid in June, and be second only to the $1.5 billion UBS AG paid in December. Chancellor of the Exchequer George Osborne said this week that RBS should pay the U.S. fines by clawing back bonuses from its investment bankers.
No individuals will be criminally charged as the Justice Department announces its settlement with the bank, according to two people with direct knowledge of the matter.
RBS may pare the bonus pool at its investment bank by more than a third, a person with knowledge of the plan said last month.
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments â either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.