London, Feb. 7 (ANI): Royal Bank of Scotland (RBS) has been slammed a 390 million pounds fine for 'widespread misconduct' in rigging the Libor rate until as recently as November 2010, two years after it was bailed out by taxpayer and even after regulators had begun to investigate the key benchmark rate.
Regulators found that corrupt payments of more than 100,000 pounds were made to those involved.
They found that the bailed-out bank had 'abetted' Swiss bank UBS, fined 940 million pounds, in manipulating the rate used to set prices on 300 trillion pounds of financial contracts around the world, from ordinary household mortgages to business loans, the Guardian reports.
According to the report, Stephen Hester, the chief executive of RBS, condemned the behaviour of 21 'wrongdoers' at the bank who have either left or been disciplined.
The chairman, Sir Philip Hampton, described it as a 'sad day' and made clear that the bank did not intend to claw back the two million pounds bonus Hester had been awarded for 2010, 700,000 pounds of which is due to be paid next month, the report said.
Hampton said the bank had been in 'a hell of a mess' when the new management team arrived in 2008.
In total, the bonus pot at RBS is to be reduced by 300 million pounds to cover the cost of the fine and some 1,500 bankers are to have bonuses clawed back following the intervention of the chancellor, George Osborne.
Osborne wanted to ensure that any fines to the US regulators, amounting to 300 million pounds of the 390 million pounds total, were not paid by UK taxpayers.
According to the report, two US regulators, the Commodity Futures Trading Commission and the US department of justice, have fined RBS 325 million dollars and 150 million dollars respectively, while the fine levied by the UK Financial Services Authority is 87.5 million pounds.
US authorities are investigating money-laundering offences and the Libor investigation is continuing in Japan and Switzerland, it said.
As part of the agreement with the department of justice, the bank has entered into a deferred prosecution agreement, while its Japanese subsidiary has entered a plea of guilty to one count of wire fraud relating to yen Libor, the report added. (ANI)