The
Royal Bank of Scotland has taken its most drastic action so far
against traders involved in the LIBOR rigging scandal by suspending
the most senior figure to date. The suspension of Jezri Mohideen, the
head of rates for Europe and Asia Pacific, has come at a time when
talk of huge fines for the Edinburgh-based bank. It is claimed Mr
Mohideen instructed other traders to lower the submission of the
LIBOR rate to strengthen the banks position in respective markets.
The
most high-ranking staff member so far to become embroiled in the
scandal which is sweeping the banking industry was considered by many
as a high-flyer in the banking world and had been promoted to the
head of rates for Europe and Asia back in 2010. The allegations stem
from his previous role as head of Yen products in Tokyo. In
an instant-message conversation recorded in 2007, two colleagues have
alleged that Mohideen, instructed colleagues in the U.K. to lower
RBS’s submission to yen Libor that day. So far no comment has been
made by Mr Mohideen or RBS in relation to the suspension and the only
comment made by a bank spokesman said: "Our investigations into
submissions, communications and procedures relating to the setting of
Libor and other interest rates are ongoing. RBS and its employees
continue to cooperate fully with regulators".
The suspension of Mr Mohideen could be the start of a more
companywide witch-hunt for individuals who took part in the
LIBOR-rigging scandal.
This
follows the suspension of 7 other traders late last year, two of
which have recently been re-instated by the bank and another Tan Chi
Min – also known as Jimmy Tan- is suing the bank for wrongful
dismissal. He claims the rate rigging was “systemic” in the
bank, a claim that has been re-iterated by inside sources in recent
months.
With
Barclays Plc, Britain’s second-biggest lender by assets, paying a
record £290 million ($466 million) fine in June it is expected RBS,
81% owned by the UK taxpayer, could exceed that amount for its
involvement and many other banks are facing investigation.
This
comes at a difficult time for RBS as shares
fell 1% amid warnings from analysts that the bank would need to cut
the price of the 316 branches it was planning to sell to Santander
for £1.6bn.The sale, forced on RBS by Brussels as a result of the
£45bn taxpayer bailout, fell
through on Friday after more
than two years of negotiations. The sale may now have to be completed
at a cut-price £0.5bn-
£1bn
less than the deal agreed with Santander back in 2010.
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