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RBS agrees £391m rate fixing fine

Report by Sophie Foster, Video by Ashley Fudge

Taxpayer-backed Royal Bank of Scotland has agreed a £391 million settlement with US and UK regulators as it became the third banking giant to admit its part in the rate rigging scandal.

The bank has agreed to pay the UK's Financial Services Authority £87.5 million, the United States Commodity Futures Trading Commission 325 million US dollars and the US Department of Justice (DoJ) 150 million dollars for Libor fixing.

RBS, which is 81 per cent owned by the Government, will recoup around £300 million from its staff bonus pool and by clawing back previous awards.

Under its settlement, RBS has also agreed a deferred prosecution agreement with the DoJ - a deal that could see it face tough sanctions if it commits any form of criminal offence during the period - while its Japanese arm has pleaded guilty to wire fraud.

The lender is one of about 20 banks which are being investigated over involvement in manipulating the rate, which governs the price of more than 500 trillion US dollars-worth of loans and transactions around the world, including household mortgages.

Wednesday's fine dwarfs the £290 million settlement agreed by Barclays last year over its involvement.

RBS chairman Sir Philip Hampton said it was a "sad day for RBS", but vowed to "put right the mistakes of the past".

Stephen Hester, chief executive at RBS, said: "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.

"Today's announcement is not the first and will not be the last reminder of the scale of the changes that need to be made. But our determination to clean up RBS for all is undiminished."

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