Exclusive: RBS closing in on rate-rigging settlement - sources

Fri Aug 24, 2012 11:37am EDT
 
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By Matt Scuffham and Sarah White

LONDON (Reuters) - Royal Bank of Scotland is expected to agree a settlement in the next two months with U.S. and UK authorities investigating its role in an interest-rate rigging scandal, according to industry sources, regulatory officials and lawyers familiar with the case.

The part-nationalized bank, which is 82 percent-owned by the government, is working towards a settlement early in the fourth quarter, two of the sources said.

Lawyers said it is likely to be the next bank to settle among all of those being pursued by regulators, with the government keen to protect the value of its stake by removing uncertainties over the issue.

"They are state-owned, they are under more pressure than most to deal with this," said one London-based lawyer connected to Libor cases.

RBS declined to comment.

"We will stand up and take any punishment that comes our way," Chief Executive Stephen Hester previously told reporters in a briefing following the bank's half-year results on August 3.

More than a dozen banks are under investigation by regulators in the United States, Europe and Asia for suspected rigging of London interbank offered rate, or Libor, and other similar rates which are used to price trillions of dollars worth of financial products.

Reuters reported in July that RBS and Switzerland's UBS were two of the banks that had played a central role in the manipulation of rates. Barclays was the first to settle over the issue, paying record fines totaling 290 million pounds ($461 million) in June following investigations by U.S. and UK authorities.   Continued...

 
Morning commuters rush past a branch of the Royal Bank of Scotland (RBS) in London November 4, 2011. REUTERS/Andrew Winning