February 6th, 2013
Kevin Mason, a commenter on the Guardian website, had this to say about the £390 million settlement that Royal Bank of Scotland reached with the Commodities Futures Trading Commission, US Department of Justice and Financial Services Authority over rampant Libor-rigging today [Mason’s words sourced from Graeme Wearden’s excellent Libor rigging live blog published online by the Guardian today].
Nick a 50p bottle of water in a riot in Tottenham, and within days, [you’ll get] a huge fine in relation to benefits and three months in a young offender’s institution and you’ll be demonised for the rest of your life.
An anonymous trader committing a fraudulent act that affects the whole British economy and attracts the attention of regulators around the world and a fine that could bankrupt a small country, and there is little or no action, no naming and shaming, no criminal prosecution.
The top manager paid an extraordinary remittance for supervising this charade walks away with a year’s salary but loses his obscene bonus as he did not have any knowledge of what his trader was doing sorry that’s why he was paid so much. There was no excuse for the riots in Tottenham and there is no excuse for the delay of criminal prosecutions in the LIBOR scandal.
Harry Wilson the Telegraph has an interesting suggestion, which doesn’t clog up the courts as much. Harry wrote:
Serious questions still remain about the culpability of some still left in the business. If RBS and other banks are truly to put this scandal behind them they must drop this approach and take a leaf out of the Team Sky reaction to doping, where anyone with the slightest link to past misbehaviour has been asked to leave to remove all taint from the organisation.
Perhaps if this were to happen, the banking industry might finally be able to begin rebuilding its reputation. Until then, all the apologies and admissions look about as convincing as Lance Armstrong’s interview with Oprah Winfrey.
The FSA final notice reveals that the traders at Royal Bank of Scotland were so brazen and cocky, they continued to conspire to manipulate Libor for pecuniary advantage, even after they knew they were being investigated. Here’s just one example of electronic chat revealing how RBS’s traders and Libor submitters laughed and joked with each other conspired to commit an act of major fraud. This one comes from 14 September 2009, eleven months after Stephen Hester replaced Fred Goodwin as the bank’s chief executive.