[Closed] RBS - Libor Fines

Good luck finding the answer to that. John Humphrys was asking Vince Cable exactly that question this morning and didn't get anywhere either although there was a suggestion that some criminal cases were being looked at

The country goes after people fiddling a couple of thousand on benefits why not people who have cost the country billions

Because its easier to go after people at the bottom of the ladder than those at the top, who have influence, power and expensive lawyers.

 

who have influence, power and expensive lawyers.

Not to mention plausible deniability

Because its easier to go after people at the bottom of the ladder than those at the top, who have influence, power and expensive lawyers.

Bit you only need to get a few of the b"£$"ards as the rewards for a victory are much greater. So go on, grow a pair and get tooled up Mr Ukgov. I'd much rather my taxes fund some weapons grade lawyers to fight our cause rather than paying both fines and bonuses. Or something like that.

Maniplulating the LIBOR rate, while completely unacceptable probably has not cost the country Billions, it probably had very little effect on the rate set and only made the RBS position very slightly more favourable.

What cost the country billions was the wrong business decisions made by many of the Investment bankers and the lax regulation from central banks/governments. A lot of the people that made these decisions are still in positions of power and that is what is very wrong.

In general the vast majority of staff who worked for these Banking institutions worked very hard and long hours, I know I was one.

But saying that, if the institution has failed, then why should any staff get bonus's? OK, when profits were made and times were good its justifiable, but not when they are still loosing billions.

Are you suggesting that people at the top take responsibility for their actions, and be subsequently held accountable?

[b]Are you insane?![/b] If you follow that logic, then It starts with the bankers, and before you know it, you'll have people in boardrooms being hauled up for killing people, massive industrial pollution, endemic corruption, rigging markets and operating cartels.

And then I suppose you'll have to move on to the politicians for starting illegal wars, raping other countries natural resources, endemic corruption, cronyism and state sponsored terrorism.

Nope. Sorry. None of that's going to fly

But saying that, if the institution has failed, then why should any staff get bonus's?

It seems that RBS has been told in no uncertain terms that the fine gets paid from the bonus pot and they also have to claw back bonuses previously awarded to make up the difference between the fines and this years bonus pot.

Wonder if it will actually happen though?

Making bad business decisions is not against the law, cheating on benefit is. And if you multiply it up, it costs us over £5 billion a year (although other estimates are aviailable)

My understanding is that individuals are being pursued with respect to LIBOR fixing and rightly so. Otherwise fining a company that is majority owned by the state would appear odd. It's a bit like taxes, the alternative is the cash paid out to shareholders (us), the price that will be charged to customers (us) or the wages paid to employees. If the burden of the tax fails to form on the employees (ie severely reduced pay) then is the government merely taking out of one hand to give to another? It reduces the potential value of its shareholding and may also result in higher price to customers.

I need to dig a little deeper to understand this....

Binners, do you not believe that Hourican's departure is an example of accountability being taken on high. It's odd since he shot of out nowhere to run that division (partly I believe that he was not/less ? tainted than his predecessors) and this (at least seems) to have occurred before his watch. But news suggest that not only is bonus pool being cut but that previous ones are also being clawed back.

Intersting about previous bonus's being clawed back. When I was working, you were more than encouraged to take your bonus in shares. Therefore a Bonus of say. £5k that you had worked extremely hard for was invested in shares at say £6 each. As the financial crises hit, those shares ventually fell to about 25p. Therefore your bonus was now worth £208. This affected very many of the ordinary workers who had no part in the crises, but had worked hard for their bonus.

Ok, easy in hindsight to say ditch out at such and such a level, but there was no telling where the fall would end up.

So therefore clawing back previously awarded Bonus's may not really be an option, unless they were cash.

thm - How can they legally claw back money, when there was no clause for that in the initial contract. You can't do these things retrospectively, can you?

I thought that was the whole problem with the likes of Fred Goodwin waltzing off with billions. The collective shrug of the board as they said 'its what he's contractually obliged too. There's nothing we can do'

At which point the obvious question becomes "well which half-wit negotiated that contract then? Or did you let hm write it himself?"

Actually... it wouldn't surprise me in the least to learn that the latter was actually true

"well which half-wit negotiated that contract then? Or did you let hm write it himself?"

my money is on the latter too 🙁

There was nothing unusual about Goodwin's contract tbh, though there was a fair bit unusual about his pension scheme. Course, he also didn't go off with billions.

Binners, my understanding is that claw back clauses have been inserted into many bonus awards since the crisis (and see yesterday's FT for details on new structures at UBS to do the same thing in future) plus the bulk of the award will have been deferred so not paid out anyway.

So there seems signs at least that these fines will come out of the total remuneration pot. I will wait to see if that actually happens.

I hate the overuse of "casino banking" as it is completely misleading and unhelpful but the more your read about rBS and others GM&B division the more uncontraversial they appear to have been. And pre-Hourican, there was plenty of smugness there.

Fines being paid out of the bonus pool? Hmmmmmm I think that the same phrase applies to most things about the surreal world of the upper echelons...

I'll believe it when I see it

It is perfectly possible. First they have been negotiating with gov/treasury etc re this year's bonus pool which will be reduce, second they claw back stuff that is deferred and interestingly this year, Osborne is proposing some scheme where the hit will come from future bonuses. That's where the scrap will be.

edit - of course, whether they should be paying any bonuses is another question!

Strange that the Old Bill haven't put any undercover agents in.You would have thought the average copper would prefer 10 years as a capitalist parasite than a scruffy hippy up a tree on a road protest.
On a similar subject I had to laugh that the woman detective got banged up for trying to sell NoW info about the police investigation into phone hacking which of course was largely facilitated by the police

Strange that the Old Bill haven't put any undercover agents in.

I'd sign up, purely for that role. 😈

The culture of greed that pervades The City is - frankly speaking - obscene. More fool us as a nation for tolerating it.

Edit: wrong forum, shirley?

Otherwise fining a company that is majority owned by the state would appear odd.

It is quite normal for NHS trusts as organisations to be fined for wrongs that arise from misconduct of individuals within them.

[url= http://www.guardian.co.uk/uk/2012/aug/06/nhs-trust-fined-data-security ]The first result of 'NHS+trust+fined' search on google. All the first page are different stories about different NHS trusts all fined within the last year.[/url]

Why should it be any different for an organisation that is a bit less than 100% state owned?

Julian, I am not arguing that. Just (in my ignorance) trying to work out how this works. So if we fine a body that is owned and funded by the government (say) what happens?. They pay the government out of funds provided by the government. Ok, this is too simple, otherwise no one would do it.

As I said before, if you take money out in the form of a fine or a tax, who suffers. Surely one or all of the following. The workers, the customers or the providers of the capital. In a nationalised entity's the latter is the same as the guys fining it isn't it? So if you save the customers and the workers, are you not merely making an accounting transfer.

Ok, so I have had a bad day and have a headache now, so fully accept that I am most probably missing something very basic here. JW if you can explain that would be great.

I can see why you might want to fine individuals responsible BTW.

THM, I was playing devil's advocate. Surely the Tiny Tory inside you should be jumping up and down at the thought that a state-owned business/service provider (in this case a bank) should have preferential or lenient treatement compared to a fully private one.

So if we fine a body that is owned and funded by the government (say) what happens?. They pay the government out of funds provided by the government.

That is pretty much what happens when an NHS trust is fined too. This also impacts on that trust's ability to care for its patients, which in the case of trusts who are forced into cutting corners and making bad decisions because they are already so skint, it seems rather counterproductive to me too. Same applies to social services and LEA's.

Of course huge misconduct and mistakes in social services, LEA's and NHS trusts are often addressed by relevant professional bodies and at a strategic/board level alongside fines: I am not sure how or if that is possible within RBS, or indeed any other bank, and I can only assume that there needs to be a sense of even-handedness in this despite how peculiar we both seem to think it is.

[afterthought] perhaps if they just fine individuals then the worry is that the bank is even more likely to stitch up or point the finger at the wrong people.

Thanks Julian. I don't get the first bit sorry! But it does all seem a little off when governments fine themselves. The papers today hint at this and this is obviously behind GOs focusing on targeting individual's past, current and future remuneration. This makes some sense up until the point where departures ruin the value of the governments investment itself (the Hester trump card - albeit not a top trump IMO).

Ok watch the England wendyballers or try to understand this?

Thanks Julian. I don't get the first bit sorry!

The 'Tiny Tory' bit or the "imagine the uproar from the Right if they fined Barclays but not RBS for the same crime" bit? 😉

It's lone maverick traders, not an endemic problem so why penalise the rest ?

You lot are acting as though it was, say, 21 of them 🙄

Isn't another problem here that with yet more fines for misconduct (does anyone think this will be the last?) that these nearly wholly state owned banks look increasingly like financial basket cases? And the likelihood of the muggins taxpayer getting anything back thats anywhere near what we poured in look increasingly unlikely?

Maybe they should have been left to go to the wall? That being the application of the capitalist system that our heroic bankers have been singing the praises of for so many personally profitable years. The whole system is ****ed!

binners - Member

And the likelihood of the muggins taxpayer getting anything back thats anywhere near what we poured in look increasingly unlikely?

If we're willing to wait, they'll probably still end up a good deal (either that or the whole economic system'll change so much that all bets are off anyway, I reckon).

Only trouble is, sooner or later some government will take the quick buck. Or, y'know, split off the toxic part then sell the valuable part for less than it's worth.

Meanwhile Uncle Vince will come up with nice-sounding but totally unworkable ideas for RBS!?!?

An interesting read

http://www.bbc.co.uk/news/business-21358362

It seems that RBS has been told in no uncertain terms that the fine gets paid from the bonus pot and they also have to claw back bonuses previously awarded to make up the difference between the fines and this years bonus pot.

As for the actual fine etc, is it not another of these "no admission of guilt, but agreed to pay a fine" deals?

RBS themselves say:

The bank said that the £300m owed to US authorities would be paid using money clawed back from bonuses already paid, and reductions to future bonuses

http://www.bbc.co.uk/news/business-21348719

So they've proved wrongdoing by 21 employees, but they're going to claw back 300 million from the bonus pool. Either those 21 employees got a big bonus or lots of people are going to get the shaft for something that was nothing to do with them.

TBH I just want to know if I'm allowed to kill anyone for wiping out the £15k I sunk into shares over the years 'coz "banks are always a safe investment". I really cant be arsed starting a pension now and my initial provision is now worth sweet fa.

So they've proved wrongdoing by 21 employees, but they're going to claw back 300 million from the bonus pool. Either those 21 employees got a big bonus or lots of people are going to get the shaft for something that was nothing to do with them.

Well, it's either them or us, the taxpayer. I don't want to pay anymore

themilo, I fear you are late joining a very long queue

TBH I just want to know if I'm allowed to kill anyone for wiping out the £15k I sunk into shares over the years 'coz "banks are always a safe investment".

Personally I'm surprised no one has had a go at one of the more high profile people eg Bob Diamond.

piedi di formaggio - Member

Well, it's either them or us, the taxpayer. I don't want to pay anymore

It's still running at a loss, shall we just claw that back from staff too? It doesn't make any less sense.