Economy
Dutch bank Rabobank faces Libor fine of nearly $1bn
Rabobank could be set to face a fine of nearly $1 billion (£618m) after the Dutch bank was accused of helping manipulate Libor and other interbank lending rates.
The Financial Times reports that three people familiar with the situation confirmed the bank was preparing for a larger than expected fine. The expected penalty – thought to be close to $1 billion – would be the second largest paid by a financial institution in the rate-rigging scandal.
Negotiations between the bank and UK, US and Dutch regulators are ongoing.
Lawyers told the FT that the large fine would worry other banks that were involved in the scandal but had yet to settle with regulators. One said, “This is quite concerning. It would seem to suggest a scaling up of penalties.”
Rabobank had previously expected to face a fine between $470m and $615m (£290m and £380m), in the same region of those that had already been imposed on other financial institutions.
Four other financial institutions have so far paid fines for their part in the scandal: the Royal Bank of Scotland (RBS) paid up £390m in February, while Barclays (£276m), UBS (£940m)and Icap (£53m) have also faced fines.
In contrast to the Libor fine, Rabobank recently announced it will not lend money to businesses that dealt with unconventional energy extraction, including shale gas.
The bank focuses on sustainability and said that the decision was taken because of the environmental and social implications of unconventional energy extraction.
Further reading:
Dutch bank refuses loan to businesses involved in shale gas
22 more people implicated in Libor scandal
RBS dealt £390m fine over rigging Libor rate
Veterans to benefit from fines paid by banks after Libor scandal