CAUGHT WITH THEIR SNOUTS IN THE TROUGH; RBS Is Fined PS390m over Libor Fix Scandal; Traders Joked about Fiddling Rates for Sex

The Mirror (London, England), February 7, 2013 | Go to article overview

CAUGHT WITH THEIR SNOUTS IN THE TROUGH; RBS Is Fined PS390m over Libor Fix Scandal; Traders Joked about Fiddling Rates for Sex


Byline: GRAHAM HISCOTT BUSINESS EDITOR graham.hiscott@mirror.co.uk

GREEDY traders at Royal Bank of Scotland joked about fiddling Libor rates in exchange for sex and sushi, shocking emails revealed yesterday.

One dealer likened his manipulation of the key City rate up and down to a "whore's drawers". Another said it was "amazing" how much could be made from the scam.

The damning evidence of rigging and bribery emerged as RBS - 81% owned by taxpayers - was fined nearly PS400million for allowing the widespread practice.

Traders in offices around the world were involved, including London, Singapore and Tokyo.

Yet while regulators said traders were fixing rates in 2006, it was still going on in 2010 - after RBS had to be saved from collapse by a PS45billion government bailout.

Libor - or the London inter-bank offered rate - represents how much banks pay to borrow from each other and is one of the most important interest rates in the world of finance, influencing how much banks around the world charge for around PS190trillion worth of financial products, including mortgages and loans.

Yet emails published yesterday revealed how traders treated it with contempt.

One, asked how much it was worth, replied: "I've got some sushi rolls", while another said "If u did that I would come over there and make love to you". Others laughed off their illegal dealing, while another wrote: "It's just amazing how Libor fixing can make you that much money." One even admitted Libor fixing had become a "cartel".

RBS chief executive Stephen Hester, brought in to clean up the mess left by the bank's previous management, led by Sir Fred "the Shred" Goodwin, admitted the revelations were outrageous. But he said the practice was just a reflection of wider problems infecting the banking sector before the financial crisis erupted.

He said: "Libor manipulation is an extreme example of a selfish and self-serving culture that took hold in parts of the banking industry during the boom. We will use the lessons learned."

Mr Hester refused to comment on whether he had considered stepping down in the wake of the scandal.

"We are not answerable for the past but we are here to move the business on," he said.

The RBS will have to pay PS87.5million to the Financial Services Authority, plus PS207.7million to the US Commodity Futures Trading Commission and PS95.8million to the US Department of Justice.

It is thought around 20 banks are being investigated over Libor rigging, with the FBI among those called in. The US Justice Department warned: "These are extraordinary results and our investigation is far from finished."

Barclays, the first bank punished for Libor rigging, was hit with a PS290million fine last year and Swiss bank UBS will pay out PS940million to regulators for its Libor offences. …

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