Royal Bank of Scotland dreads release of Libor scandal emails
Royal Bank of Scotland is bracing itself for humiliation over Libor with insiders warning of a dossier of embarrassing emails linked to the rate-rigging scandal.
UBS is expected to be the second bank to be named, shamed and fined by regulators investigating attempts to manipulate the crucial London Interbank Offered Rate interest rate. RBS is likely to be forced into the public spotlight shortly afterwards.
The Swiss bank is expected to be fined more than £300 million within the next few days by the Financial Services Authority and the US’s Securities and Exchange Commission over attempts by some of its traders to fraudulently fix the Libor rate.
Walk on by: RBS emails are understood to be damning
RBS is expected to face a similar fine in the New Year.
Barclays was fined £290 million earlier this year after it was found that some of its traders and executives had manipulated their Libor numbers.
That ruling came with the publication of a series of embarrassing emails by Barclays traders, including a notorious ‘thank you’ from one trader: ‘I owe you big time ... I’m opening a bottle of Bollinger.’
The RBS emails are understood to be equally damning and a source said they showed that those involved ‘just didn’t seem to think they were doing anything wrong’.
It is understood that British regulators pushed for UBS to be the second bank named by the international probe so that the scandal should not appear to be a solely British problem.
The FSA declined to comment on the matter. The regulator is consulting publicly on plans to reform the way the Libor is compiled.
At present, Libor – a figure designed to show the rate banks charge each other to borrow – is compiled daily from quotes provided by a group of lenders known as the Libor panel.
The make-up of the panel and a requirement that quotes are based on real loans are two of the key reforms being considered.
The British Bankers’ Association has offered to hand over its job as the official overseer of the process.
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