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The Royal Bank of Scotland is not having a good week. Earlier in the week they became the latest to be subject to investigation on the grounds of money laundering. Now they are embroiled in the Libor scandal, with one trader claiming that anyone at RBS had the opportunity to rig the benchmark interest rate:
A former trader for Royal Bank of Scotland Group has claimed that the bank’s internal checks were so lax that anyone could change Libor rates [...]
Court documents filed in Singapore show that Tan Chi Min, who is suing RBS for wrongful dismissal, claimed that in 2008 a trader for the bank, Will Hall, changed the Libor submission himself even though he was part of the Japanese yen swap desk in London.
The papers show that Tan, who worked for RBS in Singapore, raised the issue at his disciplinary meeting last September, saying that the bank’s internal procedure in London seemed to be that “anyone can change Libor”.
Tan alleges that the bank’s minutes of his disciplinary meeting omitted details of this and other conversations about how traders at the bank tried to influence RBS’s interbank lending rate submissions.
This goes much further than what we knew about Barclays, for example. There, those responsible for submitting Libor had to be sweet-talked into changing the rate. At RBS, there was apparently no internal control whatsoever. And you have the cover-up aspect.
One fun sidelight here is that RBS is owned by the state, with taxpayers holding an 82% stake. And so Labour MPs have asked George Osborne, the Chancellor of the Exchequer in Britain, what he knew about all this. Obviously a scandal of this magnitude would have an impact on RBS’ share value, so poor stewardship by the state comes into play as an issue.
I think we’ll be hearing about this Libor scandal for years and years, once we get through all of the lawsuits.
5 Comments
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Why does this remind me of a scene from a 1951 Charles Dickens movie adaptation ?
Oh, but gentlemen it could have been any one of you.
We’re all cut-throats under this fancy linen, Mr. Snedrig.
l must ask you to speak for yourself, Mr. Jorkin!
And what would you gain to prosecute me?
All you would get out of it is about eleven pounds odd.
And to pack me off to Botany Bay,
would be poor compensation for the panic that would arise among the share holders. Panic, Sir? – Yes, panic.
Would any of you gentlemen care to deny
that if this juicy little scandal leaked out now
the annual shareholders meeting
would resemble an orchestra of scorched cats.
Result… bankruptcy all around.
Well that’s really good because, you know, efficiency.
If and/or when such a thing is discovered on this side of the pond, don’t expect AG No Balls to do anything about it.
perfect comment, cmaukonen! think we could use that as a standard comment for all the world’s banksters and financial transactioneers.
wow, David, your keyboard must be smoking and on the way to meltdown as i see your byline round-the-clock with such in-depth, focused articles. Thank you!
p.s. psst *David, you make the gray lady’s scribes look like the hacks they are . . .*
I think what is also interesting here is that the British government is not bought and paid for by the financial industry the way it is in the US, where it is permitted to finance elections. That doesn’t mean there isn’t a strong ‘old-boy’ network, but sharing circle-jerks in a public school can only get you so far.
“I think we’ll be hearing about this Libor scandal for years and years, once we get through all of the lawsuits.”
The same way the “SEC”and “DOJ” buried the CDO/MBS fraud perpetrated by Wall Street giants, defrauding a nation?
1) While Many are on Vacation…..
2) While aching over Akin…..
3) While shopping for school….
4) While memory loss sets in….