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RBS may pay £350m to settle Libor rate scandal

Royal Bank of Scotland (RBS) is expected to negotiate with the European and North American regulators over a proposed settlement of £350m ($566m), related to its alleged role in manipulating Libor rate.

RBS, which is 82% UK government owned following capital infusion of £45bn during financial crisis, expects that the settlement with the regulators will take place in January 2013.

The UK’s Serious Fraud Office (SFO), the Financial Services Authority in the UK and the US Securities & Exchange Commission (SEC) have been probing the rate fixing scandal.

RBS’s chief executive Stephen Hester was quoted by The Sunday Times as saying that the bank anticipates the issue will be resolved at the earliest, so that it could start afresh in the coming year.

In a similar case, it is expected that the Swiss lender UBS may be fined $1.5bn by the market regulators and that the settlement is likely to be announced as early as this week.