As the RBS LIBOR rigging fine was confirmed at £390m, the public have begun to question how those responsible for such a huge manipulation of the financial markets are escaping prosecution.
Laura Willoughby Chief Executive of Move Your Money said:
“The FSA should never have offered an incentive for early payment, they are for speeding fines not for manipulating interest rates that affect every UK citizen – let alone the worldwide impacts of Libor fixing. This is nothing more than a slap on the wrist, not the tough political and public accountability the FSA claims to ensure.
A recent public survey for the Telegraph found 90% of UK respondents believe bankers that commit fraud or manipulate rates should be jailed, and 70% think that bankers found guilty of market abuse should be sent to prison, rather than their employers being hit with paltry fines.
Laura Willoughby continued:
“Sackings and internal disciplinary action are as good as rearranging the deck chairs on the Titanic. Bankers were incentivised to lie and cheat because of an obscene bonus and pay culture that rewarded short term profits at the expense of all other considerations. Until that changes banking won’t change.”
Rolling Stone Financial Editor Matt Taibbi is crystal clear on the human cost of Libor rigging:
“I can’t imagine how a sane person could possibly describe this as a victimless crime,” Taibbi told “Democracy Now!” on Thursday. ”Even the tiniest manipulation downward, when you’re talking about a thing of this scale, would result in tens of trillions of dollars of losses.”
There have been concerns about a public backlash over RBS, which is 81% publicly owned, sending taxpayers money across the Atlantic to pay the fine. In a speech on Monday, the Chancellor George Osborne intervened, calling on RBS to claw back bonuses in order to pay a portion of the US fine.
Laura Willoughby added:
“We cannot afford to reward bankers for failure. RBS’ reputation and business is in tatters and yet it has still set aside a bonus pool of over £250 million to give its senior staff a golden pat on the back. That is £55,000 per investment banker.
“People have simply had enough and are starting to move their money. Banks are finally learning the hard way that the customer is always king.”
David Marsden, an RBS customer from Cannock in Staffs, is closing his current and savings accounts following the announcement:
”I’ve paid for this fine twice, both as taxpayer and as a customer. Having been with RBS for nearly 20 years I’m leaving because they simply do not have the integrity I expect of a bank.”
The news comes at the end of a disastrous year for the reputation of British banks, which have been mired in scandals from mis-selling to money laundering and rate fixing.
In a speech earlier this year Andrew Haldane, a senior director at the Bank of England admitted that banks had become ‘too big to prosecute’ and the fines levied on them we’re seen as part of the costs of doing business. He appealed to ordinary customers to move their money if they wanted to change the behaviour of high street banks.