The Royal Bank of Scotland Group is reportedly in negotiations with regulators to settle charges the bank manipulated Libor. It would follow a similar settlement with Barclays just weeks ago, which ultimately led to the ouster of its CEO, Bob Diamond. But RBS chief executive Stephen Hester is no Bob Diamond.
In the wake of the Libor-rigging scandal, U.S. regulators are looking at how a key benchmark rate in the $3 trillion U.S. municipal bond market is determined. Maybe regulators read the RiskMatters blog?
Remember Ed Breen? No? He took over a well known company after it was rocked by scandal, pilloried by Congressmen and editorial writers and later had its senior executives sent to jail. He adopted a radical strategy and engineered a brilliant turnaround. It’s a lesson for banks today.
Perhaps the only thing more surprising than the LIBOR rate-fixing scandal that engulfed Barclays last week is the method by which the rate is set. For more than four decades, the benchmark interest rate has been set by a group of banks, based on voluntary declarations of each bank’s borrowing cost, not actual trades. But […]