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According to Marketwatch, the Royal Bank of Scotland Group plc (NYSE:RBS) will be fined 150 million British pounds ($233 million) by regulators after reports came out that RBS was involved in manipulating the London Interbank Offered Rate, Libor rate.

Earlier this week, Barclays PLC (NYSE:BCS) was fined $452 million for offences that were related to manipulating the labor rates.  The charges came from UK and US regulators and the UK has expressed an interest in criminal charges against the bank.

Other British banks are now being thoroughly examined to see if they played a role in the rate fixing scam.  British regulators are looking into HSBC Holdings plc (NYSE:HBC) in particular, however there is no additional news on that at this time.

An independent group analyzed the cost of this scandal that has broken out before US courts.  In the report, it was estimated that $45 billion was taken from investors just during the financial crisis alone (2008).

Since then, British politicians have vowed to make sure all that are involved receive the proper punishment.  In addition, Barclays CEO Bob Diamond has been in the government’s crosshairs as multiple politicians are calling for him to step down.  Mr. Diamond will be answering questions for a Parliament committee sometime in the near future.

Just to be on the safe side, more than 20 banks are being probed to see if they had any involvement in the libor fraud.  So far the fraud and guilty banks appear to be located only in the UK, London in particular.  Some government officials are worried about a potential backlash London may face as these events certain hurt its reputation as a world financial center.

This is just the latest bad news out of London.  If you remember JPMorgan Chase & Co. (NYSE:JPM)’s $2 billion loss, which recently was confirmed to be $4-6 billion, originated in London.  This is why the trader guilty of the loss has been dubbed the “London Whale”.

This string of sketchy activity out of London is not something that is going to give the markets any confidence.  Especially since Europe already has enough bad news to deal with.  The UK is considered to be right up with Germany in terms of financial strength in Europe and when reports like these come out of their country, it can put further stress on other EU members and world markets.

However, markets around the world are up big today after a surprisingly productive EU summit.  European leaders met and agreed to establish two new European bailout funds for Spain and Italy, primarily.  The bailout funds are designed to cut down on struggling country’s borrowing costs and they can be accessed without submitting a “bailout” request.

The bottom line here is that European leaders have finally come to a compromise in the short term on how to handle the growing crisis.  Britain needs to get London under control before more fraud come out and further disrupts market confidence.  Europe still has a long way to go but there is progress being made.