RBS fined £390m for its part in the Libor scandal

UK and US authorities have fined Royal Bank of Scotland (RBS) £390m for its part in the Libor rate-fixing scandal.

The UK's Financial Services Authority issued a fine of £87.5m, while about £300m will be paid to US regulators and the US Department of Justice. The fines are £100m more than those issued to banking rival Barclays last year for similar offences.

RBS chairman Sir Philip Hampton said it was a "sad day" for the bank.

Commenting on the announcement, Richard Ayre, chairman of the Institute of Directors in the South West, said: 

“The fines are an appropriate penalty for outrageous behaviour on the part of some RBS employees.

“It’s vitally important 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 – that is, the taxpayer - of the bank to pay for its failure to prevent wrong-doing by staff.”