• Rabobank fined $1bn over Libor

    Environment

    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.

    Read more: http://deepbluegroup.org/blog/rabobank-fined-1bn-over-libor/

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