RBS hit with bumper £430m fine for forex rigging

RBS: Fined 430 million pounds for forex market-rigging. Picture: Lisa Ferguson

As part of the latest developments, Barclays agreed a £1.53bn fine with US and UK authorities amid a raft of new settlements also involving American banking giants JP Morgan Chase and Citigroup, as well as Swiss lender UBS.

The penalty for Barclays included a record £284.4m to the UK’s Financial Conduct Authority (FCA), as the bank also pleaded guilty to a violation of US anti-trust law.

RBS’s fines for the currency manipulation come on top of a £399m hit last November, which included penalties by authorities on both sides of the Atlantic.

Both Barclays and RBS’s chief executives expressed contrition today. Antony Jenkins at Barclays said: “The misconduct at the core of these investigations is wholly incompatible with Barclays’ purpose and values and we deeply regret that it occurred.

“I share the frustration of shareholders and colleagues that some individuals have once more brought our company and industry into disrepute.”

Ross McEwan, chief executive of RBS, said: “Pleading guilty for such wrongdoing is another stark reminder of how badly this bank lost its way and how important it is for us to regain trust.”

He added: “It has taken far longer than anyone hoped to root out all the past conduct problems and practices and as a result we still have significant challenges on the horizon.”

Sir Philip Hampton, chairman of RBS, said investigations were continuing into the conduct of employees in the forex business of its investment banking division, and that as a result three people had been dismissed and two suspended from duty.

The record FCA fine on Barclays followed the bank holding off from agreeing fines in the previous round announced in November.

Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said: “This is another example of a firm allowing unacceptable practices to flourish on the trading floor.

“Instead of addressing the obvious risks associated with its business Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients and which undermined the reputation and integrity of the UK financial system.”

Four of the banks involved in the US and UK settlements – JP Morgan, Barclays, RBS and Citigroup – will plead guilty to conspiring to manipulate the price of US dollars and euros.

As part of today’s settlement, RBS will pay $395m to the US department of justice (DoJ) and $274m to the Federal Reserve, the American central bank. As well as the FCA, Barclays has now settled with US authorities including the DoJ and the Commodity Futures Tracing Commission.

The FCA said that traders colluded with each other through chat rooms to rig rates, using swashbuckling names such as “the three musketeers”, with one banker saying “we all die together”.

US regulators said that Barclays had terminated the employment of four staff – three in London and one in New York – this month and urged the bank to fire four more who are currently based in New York. The forex market has a daily turnover of more than £3 trillion, London dealing with more business than the American and Japanese markets combined.