Dutch Rabobank fined $1 billion over Libor scandal

Tue Oct 29, 2013 1:18pm EDT
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By Sara Webb

AMSTERDAM (Reuters) - U.S. and European regulators have fined Dutch lender Rabobank $1 billion for rigging benchmark interest rates, making it the fifth bank punished in a scandal that has helped to shred faith in the industry.

Rabobank said on Tuesday it would pay 774 million euros to U.S., British and Dutch regulators after 30 staff were involved in "inappropriate conduct" in scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin - benchmarks for more than $300 trillion of financial assets

Chief Executive Piet Moerland resigned, saying he was shocked by language revealed in emails exchanged by staff involved over six years to 2011. He acknowledged it would arouse indignation, both within an institution founded as a cooperative and among the public at large.

"Such behavior is entirely contrary to our core values, of which integrity is the most important," he said.

Japan's banking regulator also ordered the Tokyo branch of Rabobank to bolster its legal compliance procedures after finding that a trader had tried to manipulate the setting of yen Libor. Rabobank said it was closing its branch in Japan, cutting 30 jobs and leaving just a representative office.

The scandal surrounding the interbank rates that oil the wheels of global finance has prompted authorities to fine five institutions $3.7 billion to date. They have also charged seven men with criminal offences amid a sprawling, global inquiry that has laid bare the failings of regulators and bank bosses.

Around five years after the world's financial system buckled and forced taxpayers to fund huge rescues of crippled banks, public and political outcry has been stoked in part by industry gripes about tough new rules to rein in excessive risk-taking and fat bonuses blamed for feeding greed.

SHAMELESS FRAUD   Continued...

RABO bank CEO Piet Moerland speaks during the presentation of the annual results of 2011 at the bank's headquarters in Utrecht March 1, 2012. REUTERS/Michael Kooren