The fallout from the global interest rate manipulating scandal hit three continents yesterday as Royal Bank of Scotland paid £390m ($612m) and admitted criminal price-fixing charges over Libor rigging. A series of lurid emails, cited in the settlement, laid bare a culture where employees would readily alter rates in exchange for steak dinners.
The plea bargain with RBS – which is 82 per cent owned by UK taxpayers – was struck as Deutsche Bank suspended five employees after an investigation into the euro-equivalent of Libor. In a further expansion of the scandal, a former Japanese trader accused banks that make submissions to the Tokyo rate of operating a “cartel” to profit off home loans.
Japan has become a particular focus for scrutiny after RBS’s Tokyo subsidiary pleaded guilty to one charge of wire fraud and agreed to pay the US Department of Justice $50m of the bank’s total fine.