Britain’s Royal Bank of Scotland on Wednesday became the third major bank to be caught up in a global probe of interest rate manipulation, but what makes the $610 million fine against the lender so remarkable is how it will be paid: by the bankers themselves.
Because RBS is 80 percent owned by the British government, which bailed it out during the 2008 financial crisis, the bank plans to cut 2012 bonuses and claw back previous payouts from staffers implicated in the fraud. To take money from the corporation would, in effect, amount to making British citizens pay for the bank’s role in the scandal. RBS, Barclays of the U.K. and UBS of Switzerland were found to have rigged the London interbank offered rate, or LIBOR.
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