RBS pushed to accept criminal charge on Libor

Royal Bank of Scotland is being pressured into accepting criminal charges as US regulators close in on a £500 million fine for its alleged part in rigging key interest rates.

However, RBS executives are resisting any guilty plea, according to sources reported in the Wall Street Journal. The deal is expected to close within the next two weeks.

RBS would be the third bank, after Barclays and Switzerland-based UBS, to settle allegations over submitting false interbank lending rates, known as Libor.

Barclays was fined $453m (£288.4m) in June for manipulating Libor benchmark interest rates, while UBS paid about $1.5 billion in December.

“Discussions with various authorities in relation to Libor setting are ongoing. We continue to co-operate fully with their investigations,” an RBS spokesman said.

US regulators are seen to be emboldened to take tougher action after the markets responded calmly to previous punishments. It is understood that the British watchdog, the Financial Services Authority, is not pursuing criminal charges against RBS, though the Serious Fraud Office is investigating individuals.

A number of other banks are likely to face regulatory action, including Germany’s Deutsche. Some have held talks about reaching a sector-wide settlement.

However, regulatory sources say the banks are being unrealistic in believing they can short-cut negotiations to draw a line under the scandal.

TERRY MURDEN