Bloomberg News

RBC Says It Didn’t Collude With Other Banks in Libor Rate

July 06, 2012

Royal Bank of Canada, the country’s largest lender by assets, said it didn’t collude with other banks in setting the London interbank offered rate, distancing itself from probes on whether banks rigged benchmark rates.

“We have determined that RBC acted in accordance with the British Bankers’ Association requirement that our Libor submissions accurately reflected our perception of our cost of funds and that we did not collude with other banks,” Katherine Gay, a spokeswoman for the Toronto-based bank, said today in an e-mailed statement.

Regulators in the U.S., Europe and Asia are investigating whether banks that help set key rates for $360 trillion of securities were involved in collusion. Royal Bank is among 16 lenders that participate in setting Libor and one of 18 banks on the U.S. dollar rate-setting panel, according to the British Bankers’ Association.

Libor rates are determined by a group of banks’ daily estimates of how much it would cost them to borrow from one another for different time frames and in different currencies, including dollars, euros and yen.

The U.K. Serious Fraud Office is opening a criminal investigation into the attempted manipulation of interbank offered rates that led to Barclays Plc (BARC) getting a record fine. SFO Director David Green announced the decision to “accept the Libor matter for investigation” today in an e-mailed statement. The U.S. Department of Justice is already conducting a criminal probe.

Barclays, the U.K.’s second-largest bank by assets, was fined 290 million pounds ($449.3 million) last week for rigging Libor for profit. Chairman Marcus Agius, Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier subsequently resigned.

Citigroup Inc. (C:US), Royal Bank of Scotland Group Plc, UBS AG (UBSN), ICAP Plc, Lloyds Banking Group Plc and Deutsche Bank AG are among the firms regulators are investigating.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; David Scanlan at dscanlan@bloomberg.net


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