RBS traders boasted of Libor 'cartel'

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RBS traders boasted of Libor 'cartel'

Royal Bank of Scotland traders boasted about operating a “cartel” to rig Libor just weeks before the bank was rescued at a cost of more than £40bn by the taxpayer.

Senior traders working for RBS’s investment banking arm openly discussed fixing the world’s key borrowing rate in the months running up to the bank's collapse, according to legal documents cited by Bloomberg.

In one exchange in April 2008, Tan Chi Min, a former Singapore-based trader at RBS, messaged traders saying “Our six-month fixing moved the entire fixing, hahahah”.

Libor is the world’s main benchmark borrowing rate and is used to price hundreds of trillions of dollars of loans and derivatives across the globe. The court documents purport to show that even as late as August 2008, less than six weeks before RBS collapsed, some of the bank's traders were attempting to manipulate borrowing rates to make money.

The revelations in the legal documents obtained by Bloomberg, show that the actions of the traders could have cost British savers millions and potentially even billions of pounds in lost interest on their deposits.

In one instant message dated August 21 2007, Jezri Mohideen, RBS’s former head of yen products in Singapore, asked Neil Danziger, a London-based RBS trader, who was sacked along with three other colleagues last year, “What’s the call on Libor”. Mr Danziger replied, “Where would you like it, Libor that is.”

Another trader unnamed trader replied: “Mixed feelings, but mostly I’d like it all lower so the world starts to make sense.”

“The whole HF [hedge fund] world will be kissing you instead of calling me if Libor move lower,” said Mr Tan.

The Singapore court filings are part of a wrongful dismissal claim being brought by Mr Tan against RBS. Mr Tan has alleged that senior staff at RBS where aware of Libor fixing and condoned it.

“It’s just amazing how Libor fixing can make you that much money or lose if opposite,” wrote Mr Tan in a message to traders at other banks dated August 19 2007. “It’s a cartel now in London.”

A spokesman for RBS declined to comment directly on Mr Tan's allegations.

In a statement the bank said: Our investigations into submissions, communications and procedures relating to the setting of LIBOR and other interest rates are ongoing. RBS and its employees continue to cooperate fully with regulators.”

The legal documents cited by Bloomberg are now subject to a sealing order by the Singapore High Court.

Stephen Hester, chief executive of RBS, said yesterday that legal claims and fines resulting from scandals such as Libor are expected to cost the bank “a lot of money”. RBS has not said how much it has provisioned against Libor, however it has already put aside £50m against interest rate swap mis-selling claims.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9568087/RBS-traders-boasted-of-Libor-cartel.html

 

 

Why did we ever bail these parasites?

Why does the UK government think we will be appeased with heavy fines (especially when we own it)?

Why have we still not got a banking enquiry?