Member Article

RBS Libor fines: The Institute of Directors' reaction

The Institute of Directors (IoD) reacted positively to news that Royal Bank of Scotland (RBS) has been issued with a £390m fine for fixing Libor rates between 2006 and 2010.

A £87.5m fine was dealt by the UK’s Financial Services Authority, while approximately £300m will be paid by RBS to US regulators and the US Department of Justice.

IoD said the penalties issued to the bank were fitting to its crimes, and said trust in the financial sector must be rebuilt.

Simon Walker, director general of IoD, commented: “These fines are an appropriate penalty for truly outrageous behaviour on the part of some RBS employees.

“It is of vital importance that customers can rely on the integrity of the financial products they buy, and that these cannot be manipulated by a small number of individuals intent on playing the system for gain.

“These revelations have done much to damage the relationship of trust between British banks and their customers.

“Rebuilding that trust will require total reform of the way the Libor rate is regulated. We urge the Government to implement the recommendations of the Wheatley Review quickly, so that the rate is based on real market data and scrutinised by an independent administrator.

“We support the Government’s call to RBS for the fines to be drawn from the bankers’ bonus pool. It would be unacceptable for customers or shareholders of the bank to pay for its failure to prevent wrong-doing by staff.”

This was posted in Bdaily's Members' News section by Miranda Dobson .