RBS to pay up to #500m to settle Libor:rpt
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LONDON, Feb 05 AFP
February 06 2013, 07:10AM
The Royal Bank of Scotland (RBS) is set to announce it will settle its part of the Libor rate-rigging scandal by paying US and British authorities up to STG500 million ($A760.63 million), Dow Jones Newswires reports, citing sources briefed on the talks.
Dow Jones on Tuesday quoted one source as saying that an RBS unit, possibly based in Asia, could also plead guilty to a crime in the United States.
Some attempts to rig the Libor rate-setting process allegedly took place in Asia.
The Libor, or London Interbank Offered Rate, estimates the rates at which banks lend money to each other and affects huge numbers of contracts around the world.
Last year, the Libor system was found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure, a scandal that has seriously damaged the reputation of the City of London financial centre.
Swiss bank UBS was the first bank to reveal problems in the rate-setting process, and two former UBS employees were charged in December when the group's UBS Securities Japan unit settled similar allegations with US and British authorities for $US1.5 billion ($A1.45 billion), the biggest amount to date.
In the case of RBS, US Justice officials did not plan to charge individuals at the bank with crimes, however, Dow Jones said.
The British government owns more than 80 per cent of the shares in RBS, owing to a massive STG45.5 billion ($A69.22 billion) bailout of the bank during the global financial crisis (GFC), and there is considerable pressure in Britain for senior bank executives to take responsibility for the scandal.
Barclays bank agreed in June to pay around $US450 million ($A433.59 million) in connection with the affair, which led to the resignations of three Barclays senior board members, including then chief executive Bob Diamond.
More than a dozen other institutions remain under investigation.