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'It’s up and down like a whore’s drawers!' RBS trader’s boast as he fixed bank lending ratesVince Cable wants power to grant loans back in hands of bank managersBusiness Secretary calling for action to reverse decline in lending to SMEsWill demand banks publish details of how much and where they lendCable is due to make a speech at Bloomberg offices in central London
bonus and long-term incentive shares.
In all 21 staff were involved in
attempting to manipulate interbank lending rates – specifically Japanese
Yen and Swiss Franc Libor submissions – from October 2006 to as
recently as November 2010.
All 21 have left or been subject to disciplinary action and two managers with supervisory responsibilities have stepped down.
SEX AND SUSHI: TRADERS SWAPPED FAVOURS FOR FIXING RATES
Here are some extracts released by the US Commodity Futures Trading Commission, which investigated the manipulation. It shows how traders did deals with the staff who submitted the Libor lending rates to manipulate it higher or lower.
August 20, 2007
Senior Yen Trader: the whole HF (hedge fund) world will be kissing you instead of calling me if libor move lower
August 20, 2007
Senior Yen Trader: this libor setting is getting nutss
September 15, 2007
Yen Trader 1: can we lower our fixings today please
Primary Submitter: make your mind up haha , yes no probs
Yen Trader 1: im like a whores drawers
December 4, 2008
Swiss Franc Trader: can u put 6m swiss libor in low pls
Primary Submitter: NO
Swiss Franc Trader: should have pushed the door harder
Primary Submitter: Whats it worth
Swiss Franc Trader: ive got some sushi rolls from yesterday
Primary Submitter: ok low 6m , just for u
May 14, 2009
Swiss Franc Trader: pls can we get super high 3m super low 6m … PRETTY PLEASE!
Primary Submitter: 41 & 51
Swiss Franc Trader: if u did that i would lvoe u forever
Primary Submitter: 41 & 55 then …
Swiss Franc Trader: if u did that i would come over there and make love to you your choice
Primary Submitter: 41+51 it is
Swiss Franc Trader: thouht so
Primary Submitter: so shallow
Six staff have been dismissed, including two managers, while six have
been severely disciplined or are going through a disciplinary process.
Another eight left the organisation before disciplinary action could be
taken and one was dismissed for misconduct not related to these
findings, added RBS.
All staff that have left the bank as a result of the investigation
received no bonus for 2012 and saw full claw-back of any outstanding
Mr Osborne insisted the taxpayer would not pick up the bill for wrongdoing.
will recoup around 300 million from its staff bonus pool and by
clawing back previous awards, while investment banking boss John
Hourican will step down, forfeiting his 2012 bonus and long-term
Chancellor said: 'What happened at RBS and other banks is totally
unacceptable. At my insistence the banks not the taxpayers will pick up
the bill. “Those responsible will face the full force of the law.'
Earlier Business Secretary Vince Cable said: 'Obviously it doesn't make any sense
to pass on the costs of past misbehaviour on to the customers or to the
In the Commons Treasury minister Greg Clark said that the Government was clear that 'any organisation or individuals found guilty of this sort of wrong-doing must take full responsibility and should be punished, if appropriate, by both the civil and the criminal law'.
He said the Treasury would ensure that the authorities have all the resources they need to ensure that the guilty people are brought to justice.
But he added: 'This action against the perpetrators is clearly not sufficient. It is right that in the face of misconduct on this scale, responsibility is taken at senior levels.
'That is why, although the report clears senior management of any involvement in or knowledge of the misconduct, it is right that John Hourican – who was the leader of the investment bank since 2008 – will leave RBS after handing over his responsibilities.'
Mr Clark said it was right for the largely state-owned RBS to face 'the full force of regulatory action' for its misconduct, but that 'it would clearly be wrong for the taxpayer to foot the bill.
Legislation passed by the Government last year meant that fines paid to the FSA, after the costs of enforcement have been covered, will be passed on to the Treasury for the benefit of the taxpayer. Some of that money will be used to support military good causes.
Chancellor George Osborne condemned the 'totally unacceptable' behaviour at RBS as Business Secretary Vince Cablecalled for a return to traditional values in banks
Lending to small businesses has fallen
by 7.8billion since the Government’s Funding For Lending scheme,
designed to boost lending, was introduced last August. It is down by a
massive 41.9billion since David Cameron came to power in May 2010.
In a speech this morning, Mr Cable graded the banks ‘C minus’ for their efforts and attacked the ‘pathetic claim’ by some ‘that they can’t find credit-worthy business customers’.
He blamed the dearth of funds on the big four high street banks – RBS, Lloyds, Barclays and HSBC, which account for 85 per cent of small business lending – and called for a return to the days when local managers made decisions about who received loans.
In a separate swipe at the banking industry, he warned the taxpayer should not have to foot the bill for rule-breaking at RBS which is braced for criminal charges and a 400 million penalty for its role in the Libor-fixing scandal.
Bring back bank managers: Dad's Army's Captain Mainwaring revelled in his role as a bank manager
Mr Cable called for a cultural change
which valued the work of traditional, local bank managers.
‘If you were an ambitious young banker in the past couple of decades, you didn’t imagine yourself as a commercial relationship manager out in the sticks, but as a whizzkid in Canary Wharf or the City,’ he said.
‘Over time, the big banks got rid of real talent in business banking and responded to that loss of talent by disempowering what remained.
'The result was a downward spiral from which they’ve yet to escape.
‘Lending to SMEs [small and medium-sized enterprises] is difficult – it requires people with skill, understanding, and patience.
'It’s regrettable that lenders in branches, who don’t receive the astronomical bonuses, have been tainted by the excesses of their distant cousins in the skyscrapers.’
He said banks might be compelled
by law to reveal details about their lending.
‘I’d be surprised and
very disappointed if this information was not already available each
week in spreadsheet form on every CEO’s desk. In the absence of
co-operation, we shall seek a regulatory solution. There has been a
remorseless decline in lending to SMEs.’
ARCHBISHOP HITS AT PAY
The new Archbishop of Canterbury has attacked Barclays for handing out multi-million pound bonuses, as the bank revealed that it had set aside another 1billion for mis-selling scandals.
Justin Welby, who was formally appointed this week, told chief executive Antony Jenkins that pay should be cut ‘significantly’.
‘Having run a hospital where top consultants are saving lives every day – most of them are earning just 150,000 a year. So I am talking about significantly,’ he said at a hearing of the parliamentary committee on banking standards.
Mr Jenkins replied that pay had to remain ‘competitive’.
Cable plans to demand that banks set aside a fixed percentage of the
80billion Funding For Lending cash to lend to small businesses.
‘Banks often complain – when they aren’t making the rather
pathetic claim that they can’t find credit-worthy business customers –
that they cannot do more,' he said.
'Around one in four SMEs thinking
about applying for a loan don’t even get so far as applying. They think
they won’t get the loan.’
Mr Cable also said he is ‘concerned’ about the economy, where there is ‘continuing nervousness about a relapse’.
night, he said that bankers who sold interest rate swap loans – which
led to stiff financial penalties if rates fell – to tens of thousands of
small businesses could be guilty of ‘fraud’.
some bankers knowingly commit fraud when they mis-sold these swaps’ he
said at the Federation of Small Businesses dinner in London.
at the same dinner, Chancellor George Osborne pledged that the Budget
on March 20 will be ‘unashamedly, unapologetically, unabashedly