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RBS agrees to pay £390m to settle Libor rate scandal

The Royal Bank of Scotland (RBS) has agreed to pay $612m (£390m) monetary penalty over settling of Libor rate rigging scandal with the US and UK regulators.

Under the settlement plan, the lender will pay £87.5m, $325m and $150m to the Financial Services Authority (FSA), the United States Commodity Futures Trading Commission (CFTC) and the United States Department of Justice (DOJ), respectively.

The 82% UK owned lender also has entered into a Deferred Prosecution Agreement with DOJ, pertaining to one count of wire fraud relating to Swiss Franc Libor and one count for an antitrust violation of Yen Libor, as per the settlement plan.

Commenting on the settlement with investigators, RBS chairman Philip Hampton said, "The RBS Board acknowledges that there were serious shortcomings in our systems and controls and also in the integrity of a small group of our employees."

RBS markets and international banking division chief executive John Hourican will step down from his post, "in recognition of the management issues identified in relation to the settlement and the impact on the Group’s reputation."

The bank had extended full cooperation to regulators during the inquiry period and also implemented various corrective measures to strengthen the systems and controls governing its Libor submissions.