Four traders from the Royal Bank of Scotland were sacked at the end of 2011 for their alleged role in fixing inter-bank interest rates, banking industry sources said Sunday. The revelation comes after the state-rescued RBS confirmed it was being investigated for manipulating the rates at which banks lend to each other.
"Four traders were sacked for this," a source said. "It was at the end of last year."
RBS, which is 82-percent owned by the government, declined to comment when contacted by AFP. Britain will hold a review into the setting of benchmark inter-bank interest rates and seek to criminalise rate-fixing, the Treasury finance ministry said Saturday, following a scandal at major lender Barclays.
The independent review aims to restore trust in Libor, a key benchmark reference rate that influences a swathe of other borrowing costs, after Barclays was hit with a record £290 million ($452 million, 362 million euro) fine Wednesday for attempted manipulation.
The attempted rate-fixing took place between 2005 and 2009, with traders submitting false information about Barclays' borrowing rates to make the bank look more secure or, in some cases, to turn a profit.
Business Secretary Vince Cable urged shareholders in British banks to "get a stronger grip" on the boards and executives responsible for "systemic abuse".
"Regulators are a backstop: they don't own banks," he wrote in The Observer newspaper.
"The governance at the top of our leading banks has been shown to be lamentably weak. No one at the top of Barclays will take responsibility for systemic abuse."
He added: "Shareholders, the owners, have a major responsibility here.
"Shareholders have to get a stronger grip on weak boards and out-of-control executives." Adair Turner, the chairman of the Financial Services Authority which regulates the industry, said "significant steps" had already been taken to prevent a repeat of the Libor scandal and that he did not think such behaviour was taking place now.
But he said the malpractice was not covered by criminal law.
"People are justifiably angry at some of the practices that were present in particular in the run-up to the financial crisis in 2008," he told BBC television.
Cable said the public wanted to see bankers prosecuted if they committed criminal offences.
"They just can't understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like a conspiracy," he told Sky News television.