RBS reached a settlement with the European Commission, in relation to competition law breaches concerning certain interest rate derivatives referenced to the London Interbank Offered Rate based on Japanese Yen (Yen LIBOR) and the Euro Interbank Offered Rate ('EURIBOR').
As detailed in the Commission's announcementWednesday, RBS was one of seven banks and brokers implicated in respect of Yen LIBOR competition infringements and has agreed to pay a settlement penalty of $353.7m to resolve the investigation.
RBS was also one of seven banks implicated in the EURIBOR competition infringement and has agreed to pay a settlement penalty of $178.2m to resolve the investigation.
Both these payments are covered by provisions already made by RBS.
This announcement follows the settlement reached by RBS in February this year with US and UK regulators in relation to investigations into submissions, communications and procedures around the setting of the London Inter Bank Offered Rate ('LIBOR').
Since becoming aware in 2011 of improper conduct in connection with rate setting, RBS management has taken action to strengthen significantly the systems and controls governing its submissions of LIBOR and other trading rates. For example:
- RBS has created an independent and ring-fenced rate setting team.
- All relevant staff are obliged to undertake a comprehensive training programme.
- New preventative and detective controls have been put in place that include monitoring and statistical checking of submissions by independent personnel within RBS.
- A Rate Setting Review Board has been created to oversee the submission process.
Philip Hampton, RBS Chairman, said: 'We acknowledged back in February that there were serious shortcomings in our systems and controls on this issue, but also in the integrity of a very small number of our employees. Today is another sobering reminder of those past failings and nobody should be in any doubt about how seriously we have taken this issue. The RBS board and new management team condemn the behaviour of the individuals who were involved in these activities. There is no place for it at RBS'.