Rabobank Tightens Risk Control After $1.1 Billion Libor PenaltyMaud van Gaal
Rabobank Groep will put Chief Financial Officer Bert Bruggink in charge of all risk management after the company was fined 774 million euros ($1.1 billion) for rigging interest rates.
The Dutch cooperative lender will centralize risk management for financial markets and commercial banking under Bruggink, who’s already responsible for risk in the rest of the group, Hendrik Jan Eijpe, an Amsterdam-based spokesman for the firm, said by telephone today. Dutch newspaper Het Financieele Dagblad reported the measure earlier.
Rabobank, fined in October for manipulating interbank lending rates, is tightening control over its operations after the Dutch central bank said the scandal showed the company “seriously violated” sound business principles and failed in compliance and risk management. Deutsche Bank AG was among six banks fined by the European Union for manipulating rates last week, bringing the global total for the penalties to $6 billion.
Rabobank’s commercial-banking chief and board member Sipko Schat stepped down after the October fine was announced. The company said last month that it expected to name a successor “within a reasonable time.”
Bruggink and Berry Marttin, whose responsibilities include international consumer banking, are the only executives on the five-member board to have served for more than a year. Chairman Piet Moerland left in October. His successor Rinus Minderhoud told the Dutch Parliament last month that he was sorry for the damage the rates scandal did to the finance industry’s reputation.
Rabobank, a cooperative formed in 1898 to serve Dutch farmers, said earlier this year that it’s seeking to rein in lenders belonging to the cooperative to ensure better compliance with regulatory rules, including documenting of mortgage lending. It appointed Ralf Dekker chief operating officer in November, overseeing information technology and payment services for all units.