6 February 2013
Last updated at 08:29 GMT
The head of RBS's investment banking arm since 2008, John Hourican, is also expected to step down.
However, there is no suggestion he was involved in the scandal.
RBS is accused of colluding with other banks to rig Libor rates during the global financial crisis. Barclays and UBS have already received fines.
Speaking on the BBC's Today programme the Business Secretary, Vince Cable, said the government had made it clear to RBS that it wanted the bank and the bankers responsible to "absorb" the fines, saying that neither taxpayers nor bank customers should have to pay.
But he acknowledged that the government could not force RBS to act, despite its majority stake.
Settlement talks
RBS is in "late-stage settlement discussions" with US and UK authorities
Royal Bank of Scotland
(RBS) is expected to be fined a total of about £400m ($625m) by UK and
US regulators later as a result of the Libor scandal.
However, there is no suggestion he was involved in the scandal.
RBS is accused of colluding with other banks to rig Libor rates during the global financial crisis. Barclays and UBS have already received fines.
Speaking on the BBC's Today programme the Business Secretary, Vince Cable, said the government had made it clear to RBS that it wanted the bank and the bankers responsible to "absorb" the fines, saying that neither taxpayers nor bank customers should have to pay.
But he acknowledged that the government could not force RBS to act, despite its majority stake.
Settlement talks
In a statement released on Wednesday morning, RBS said it was
still in "late-stage settlement discussions" with US and UK authorities
over "potential settlements".
"Although the settlements remain to be agreed, RBS expects they
will include the payment of significant penalties as well as certain
other sanctions," the bank said.
Those discussions are taking place with the Financial Services Authority in the UK, the US Commodity Futures Trading Commission and the US Department of Justice.
It is unclear how RBS, which is 81% owned by the UK government, will pay the fines, most of which will be to the US authorities.
Swiss bank UBS admitted to wire fraud charges against its Tokyo office as part of its £940m settlement with international regulators in December.
Barclays, the first bank to admit to its role in rigging Libor, paid a total of £290m.
Sacrificial offering? Mr Hourican, who earned £3.5m for last year's work, is expected to lose his bonus for 2012 along with his position as head of RBS's investment bank. He is also expected to forego £4m of bonuses from previous years, in order to help pay the expected fines.
Mr Hourican is the highest profile casualty at the bank since it emerged last year that dozens of bankers had wilfully manipulated the key interest rate.
Libor, a daily average of borrowing costs announced by a panel of London-based banks, is used to calculate payments on hundreds of trillions of dollars-worth of financial contracts.
Sources speaking to Newsnight's business reporter Joe Lynam say that because Mr Hourican had no direct or indirect knowledge of the rate rigging, many within RBS regard his impending departure as a sacrificial offering.
During his time in control of the investment banking division at RBS, Mr Hourican played a key role in returning the bank from the verge of total collapse to a near break-even point today, which could see it sold off by the UK government next year.
He oversaw a considerable shrinkage of the investment bank, with employee numbers cut by 10,000 to just 16,000, and a halving of the total size of the division's investments.
The division is expected to be broken up into two new units, covering corporate advisory work and financial markets trading activities respectively.
Read more: updatallnews
Those discussions are taking place with the Financial Services Authority in the UK, the US Commodity Futures Trading Commission and the US Department of Justice.
It is unclear how RBS, which is 81% owned by the UK government, will pay the fines, most of which will be to the US authorities.
Swiss bank UBS admitted to wire fraud charges against its Tokyo office as part of its £940m settlement with international regulators in December.
Barclays, the first bank to admit to its role in rigging Libor, paid a total of £290m.
Sacrificial offering? Mr Hourican, who earned £3.5m for last year's work, is expected to lose his bonus for 2012 along with his position as head of RBS's investment bank. He is also expected to forego £4m of bonuses from previous years, in order to help pay the expected fines.
Mr Hourican is the highest profile casualty at the bank since it emerged last year that dozens of bankers had wilfully manipulated the key interest rate.
Libor, a daily average of borrowing costs announced by a panel of London-based banks, is used to calculate payments on hundreds of trillions of dollars-worth of financial contracts.
Sources speaking to Newsnight's business reporter Joe Lynam say that because Mr Hourican had no direct or indirect knowledge of the rate rigging, many within RBS regard his impending departure as a sacrificial offering.
During his time in control of the investment banking division at RBS, Mr Hourican played a key role in returning the bank from the verge of total collapse to a near break-even point today, which could see it sold off by the UK government next year.
He oversaw a considerable shrinkage of the investment bank, with employee numbers cut by 10,000 to just 16,000, and a halving of the total size of the division's investments.
The division is expected to be broken up into two new units, covering corporate advisory work and financial markets trading activities respectively.
Read more: updatallnews
No comments:
Post a Comment