Royal Bank of Scotland has been fined $612 million by U.S. and British authorities in a settlement involving allegations that the bank manipulated Libor, and regulators warned of even more penalties as the investigation proceeds.
As part of an effort to reduce public backlash, the bank, which is the third to pay fines regarding the Libor scandal, said on Wednesday that it would reduce bonuses to help pay the penalty. The U.K.’s Financial Services Authority said that more fines will be issued throughout the investigation, Reuters reports.
“The size and scale of our continuing investigation remains significant,” Tracey McDermott, the director of enforcement and financial crime at the FSA, said, according to Reuters.
Switzerland’s UBS paid $1.5 billion in penalties in December, and the U.K’s Barclays agreed to pay $453 million for its role in the Libor scandal, in which banks allegedly manipulated the benchmark interest rate for personal profit and to quell concerns regarding the financial health of the institutions.
Some reports indicated that other banks could resolve their liability in the scandal via a group settlement, but Lanny Breuer, the head of the U.S. Department of Justice’s criminal division, said that penalties will be issued to each bank involved.
“Criminal cases are not resolved in a group setting,” Breuer said, Reuters reports. “We are going to go after each individual financial institution.”
Investigators said that they uncovered hundreds of attempts by RBS employees in London, Singapore and Tokyo to manipulate Libor, and RBS traders helped other banks to rig the rates between 2006 and late 2010. The FSA criticized the bank for putting derivatives traders in close proximity to Libor rate-setters, adding that the bank’s systems were flawed as recently as March.
RBS will pay $137 million to the FSA, $150 million to the U.S. Department of Justice and $325 million to the CFTC, which regulates derivatives trading. A Japanese unit of RBS also pled guilty in the U.S. to one count of criminal wire fraud, though the parent company has avoided liability in the U.S. and has been able to retain its U.S. banking license, according to Reuters.