The Libor rigging scandal was reignited on Tuesday, forcing the chairman of Rabobank to quit after the Dutch bank was fined €774m (£662m) for rigging the benchmark interest rate.
As Piet Moerland the chairman of the mutually owned bank announced he would step aside earlier than planned, regulators said some of the bank's traders had colluded with rivals at other financial firms in an attempt to move rates to make a profit, in one of the worse cases they had investigated.
Some 30 individuals were involved, according to the Dutch bank, which has until now escaped the financial crisis virtually unscathed and without the taxpayer bailouts needed by its rivals. There were 500 instances of attempted Libor manipulation, directly or indirectly involving at least nine managers. One manager was actively involved in attempted manipulation and facilitated a culture in Rabobank's offices in New York, London, Utrecht, Tokyo, Hong Kong and Singapore where this practice appeared to be accepted, or even endorsed by the bank, regulators said.
The regulators unleashed the customary cache of emails containing colourful language used by traders. One manager said to a trader that he was "fast turning into (that traders) bitch!!!!".
The fine is the second largest for Libor rigging – the largest is the £940m paid by Swiss bank UBS – and the fifth levied by regulators on both sides of the
Atlantic in their attempt to crack down on the manipulation of the benchmark rate. The bank had entered into a deferred prosecution agreement with the US department of justice.
Moerland, who has been the bank – which prides itself on its integrity and its roots in the agricultural business – for 30 years, said he was shocked by the practices uncovered at the bank.
"I sincerely regret that a number of Rabobank employees acted in an inappropriate manner. This should never have taken place at Rabobank," said Moerland. "The conduct of these individuals, and the language of some of the individuals' communications, has shocked me. Rabobank fully understands the sense of indignation that this will cause both within our organisation and more broadly." The US regulator, the Commodity Futures Trading Commissions, said Rabobank employees were making submission to Libors that they saw at the time as ,"ridiclous", "obseenly high" and "silly low".
Libor – set in a number of currencies by special "submitters" at so-called panel banks - is used to price around £300tn of contract. Rabobank sat its submitters next to its traders and in some cases traders assumed the role of submitter. The traders sat next to the submitters until July 2012.
The Financial Conduct Authority – which is levying £105m of the total – said the bank had no regard to the integrity of the market. Tracey McDermott, the FCA's director of enforcement and financial crime said: "Rabobank's misconduct is among the most serious we have identified on Libor. 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".
The fine is largely related to Yen Libor, and to a lesser extent, those prices on dollars and sterling.
None of the individuals are identified by the FCA, which along with other regulators has fined Swiss bank UBS, RBS and the interdealer broker Icap, as well as Barclays, the first bank to be fined in June 2012.
In June, Moerland said he would retire from the bank, set up in 1898 to fund Dutch farms, next year. He is replaced by Rinus Minderhoud, a member of the supervisory board since 2002.
Moerland acknowledged that Rabobank had not appreciated the risk involved in setting Libor and its euro equivalent Euribor. "We have taken severe disciplinary measures against employees directly involved in or otherwise responsible for the unacceptable conduct," he added.
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