Rabobank fined $1bn over Libor
According to Dutch
bank Rabobank, it has agreed to pay fines of 774m euros ($1bn; £662m) imposed
by US, UK and Dutch regulators over the Libor interest rate-fixing scandal.
The bank added that
its chief executive, Piet Moerland, had stepped down.
To set trillions of
dollars of financial contracts, Libor rates are used.
These comprise many
car loans and mortgages, and this also includes complex financial transactions
around the whole world.
From the time of the
year 2012 in the wake of Barclays’ £290m ($454m) fine by US and UK authorities,
regulators have been investigating the exploitation of Libor inter-bank lending
rates.
A thread of
international banks has been concerned in the matter, while more than a few
criminal charges have been conveyed in opposition to traders.
Tracey McDermott
Director of enforcement and financial crime, FCA said “Traders and submitters
treated Libor submissions as a possible method to make money, with no look upon
for the truthfulness of the market.”
‘Extremely
disappointing’
The UK’s Financial
Conduct Authority (FCA) said it had fined Rabobank £105m for “serious,
prolonged and widespread misconduct relating to Libor”.
The £105m fine is the
third-highest on record by the FCA or its predecessor, the Financial Services
Authority (FSA).
The FCA said the
bank’s “poor internal controls” encouraged collusion between its traders and
Libor submitters and attempts at benchmark manipulation.
Rabobank did not
fully address these failings until August 2012, despite assuring the regulator
in March 2011 that “suitable arrangements” were in place, the FCA said.
Tracey McDermott,
director of enforcement and financial crime at the FCA, said: “Traders and
submitters treated Libor submissions as a potential way to make money, with no
regard for the integrity of the market. This is unacceptable.”
Ms McDermott added:
“Rabobank’s flawed assurances and failure to get a grip on what was going on in
its business were extremely disappointing.”
Royal Bank of
Scotland (RBS) was fined £390m by UK and US regulators for its involvement in
the Libor scandal in February 2013.
At the time, the FSA
fined RBS £87.5m, at the same time as about £300m was paid to US regulators and
the US Department of Justice.
UK broker ICAP was
fined $87m for its part in the rate-fixing scandal last month.
Three of its former
traders were charged in New York with several counts of wire fraud as well.
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