BANKING

RBS prepares for Libor settlement

BLOOMBERG FILE PHOTO/SIMON DAWSON
THE ROYAL BANK OF SCOTLAND PLC is negotiating a settlement with the authorities investigating the bank’s involvement in the Libor scandal, according to the Wall Street Journal.
Posted 7/31/12

LONDON – The Royal Bank of Scotland Plc. is negotiating a settlement with the authorities investigating the bank’s involvement in the Libor scandal, according to the Wall Street Journal.

Authorities are investigating attempted interest-rate rigging during the financial crisis at RBS and other banks. According to the news source, a deal – including fines – may be announced in the next few months.

RBS insiders worry that public outcry may force politicians to oust Stephen Hester, the CEO responsible for stemming losses after the state-owned bank was bailed out by U.K. taxpayers. According to the Journal, Hester is widely supported both inside the bank and out.

RBS is in a unique situation among the banks spotlighted in the trans-Atlantic rate rigging investigation because the U.K. government holds an 83 percent stake.

“That has put U.K. authorities in an awkward position: They are under intense pressure to get tough on wayward banks but also are eager to protect the value of a taxpayer asset,” said the Journal.

The bank has publicly condemned the bad behavior of its bankers and is privately updating its own succession plans in an effort to minimize fallout from the eventual settlement, according to the paper.

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