Bloomberg News

RBS Said to Be in Talks With U.K. Regulators Over Libor

September 07, 2012

Royal Bank of Scotland Group Plc is in talks with the U.K.’s Financial Services Authority to settle accusations that some of its employees conspired to manipulate Libor interest rates, a person familiar with the matter said.

The bank’s efforts to resolve the matter have been slowed down by concern at RBS (RBS) over what happened at Barclays Plc (BARC) in June, when its settlement of allegations related to the London interbank offered rate led to the ouster of Chief Executive Officer Robert Diamond, said the person, who asked not to be named because the matter wasn’t public.

The amount that RBS has been discussing as a settlement would probably be greater than 290 million pounds ($462 million), the amount agreed to by Barclays, because of the belief among regulators that the conduct at RBS was worse, the person said.

UBS AG (UBSN), based in Zurich, is also trying to reach a settlement with regulators in the U.S. and U.K. over its role in a scheme to manipulate Libor, said another person familiar with the talks who also asked not to be named because the matter wasn’t public.

Ed Canaday, a spokesman in the U.S. for Edinburgh-based RBS, declined to comment on the talks.

Confidence in Libor, a benchmark for financial products valued at $360 trillion worldwide, was dented by Barclays’ admission that it submitted false London and euro interbank offered rates.

Lawsuits

Diamond, who built Barclays’s investment bank into the world’s biggest global bond underwriter, resigned in July after the bank was fined by U.S. and U.K. regulators for attempting to rig Libor. Antony Jenkins replaced Diamond as CEO. Barclays also faces class-action investor lawsuits related to Libor.

Libor is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. Lenders are asked how much it would cost them to borrow from one another for 15 different periods, from overnight to one year, in currencies including dollars, euros, yen and Swiss francs. After a set number of quotes are excluded, those remaining are averaged and published for each currency by the BBA before noon.

To contact the reporters on this story: Lindsay Fortado in London at lfortado@bloomberg.net; Greg Farrell in New York at gregfarrell@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net; Michael Hytha at mhytha@bloomberg.net


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