- Special Pages
LONDON: Royal Bank of Scotland faces the prospect of scrapping all bonuses for its investment bankers this year to free up cash to pay fines for its involvement in a global interest rate rigging scandal (Libor).
The part-nationalised bank, which is expected to face fines of between £400m and £500m ($787m), is under pressure from Britain’s Finance Minister George Osborne to ensure that taxpayers do not suffer as a result.
RBS is expected to be fined up to £100m by Britain’s financial regulator with the rest being paid to US authorities, sources have said. Britain’s finance ministry wants the US fines to be paid out of money.
“Any UK fine will already go to the public, and the Chancellor has made it clear that on this occasion the bill for any US fine should be paid for by the bankers, and not the taxpayer,” a Treasury source said. The directive will not be welcomed by the bank, which has previously complained about government interference.
Last year, RBS paid out £390m to its investment bankers. It had proposed reducing the amount paid by between £100m and £150m this year to help pay the fines, sources had previously said.