John Mann, a labor MP on the Treasury Select Committee, has remarked that RBS’s Libor rigging scandal may be worse than Barclay’s PLC (LON:BARC) (NYSE:BCS), citing that Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) may be compelled to fork out heftier fines, as opposed to Barclays PLC (LON:BARC) (NYSE:BCS), its U.K competitor.
Mann has now put the pressure on George Osborne, questioning Osborne whether he or his colleagues were familiar with the depth of RBS’s scandals. He is also interested in knowing when the FSA inquiry into Libor fixing at Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) commenced.
Mann further went on to say that the failure to inform UK Financial Investment (UKFI) about the seriousness of RBS’s investigations, and suggested that Osborne was either, for reasons unknown, not telling parliament all he knew, or he was simply not running the treasury properly.
Interestingly, Mann appears not to be the only one kept in the dark about the seriousness of RBS’s Libor rigging allegations. City Minister Mark Hoban claimed that he got wind of the scandal not long ago; heightening Mann’s discomfort with the way Osborne handled the whole issue.
A treasury spokesperson noted that the treasury would not give any comments regarding the current investigation.
An agitated Mann has however made it clear on his end that he will not rest until his inquiries have been addressed. The MP went on to suggest that Osborne’s position was compromised especially after considering his fiscal projections that leaned towards an expected bonanza from RBS’s move to go private again. This came out from a remark he made. “If Osborne denies receiving any information there needs to be a full Cabinet Secretary investigation into the running of the UK taxpayers investment in RBS; the failure to protect future share values and the liability of both Osborne and UKFI, if losses accrue to the taxpayer due to a lack of due diligence,” he noted.
Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS), a state owned bank, is one of the many banks that have been dragged into to the protracted Libor scandal. The can of worms was opened a while back by Barclays, after it hit the headlines earlier in June, over allegations of manipulating the London Interbank offered rate, commonly known as Libor.
Following Barclay’s PLC (LON:BARC) (NYSE:BCS) transgressions, U.S and British authorities compelled the bank to cough up £290 million to make up for its role in manipulating the costs at which millions of global customers borrow.
We had noted earlier that the Libor scandal was far from over, noting that over 12 banks had been dragged into the scandal. Perhaps this is a materialization of our foresight.