Treasury minister Greg Clark said it’s “another day of shame” for U.K. banks after Royal Bank of Scotland Group Plc, Britain’s biggest publicly owned lender, was fined about $612 million for manipulating interest rates.
The Edinburgh-based lender today received the second-largest penalty imposed in a global regulatory probe into the rigging of Libor benchmarks. It was a blow to Chief Executive Officer Stephen Hester’s attempt to overhaul the lender after it took 45.5 billion pounds ($71 billion) from taxpayers in the largest bank bailout in history in 2008.
“This is another day of shame for Britain’s banks,” Clark told the House of Commons in London, an hour after the announcement of the fines by the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice and the U.K. Financial Services Authority. “Let there be no excuses, let us have enduring fundamental reform and let us have justice.”
Clark welcomed the resignation of RBS’s investment banking chief, John Hourican. “It is right that responsibility is taken at senior levels,” he said.
The fines being levied by U.S. authorities “must be met in full from past, present and future reductions in bonuses and variable remuneration,” he said, as it would “clearly be wrong for the taxpayer to foot the bill.”
The fine, the third to result from the global probe so far, exceeds the 290 million pounds Barclays Plc paid in June, and is second only to the $1.5 billion Switzerland’s UBS AG paid in December.
Labour Party lawmaker Chris Leslie, who speaks for the opposition on Treasury matters, described RBS’s involvement in the Libor scandal as an “appalling saga” and said his party will table amendments to banking legislation currently making its way through Parliament to make it tougher.