RBS is considering to remove investment banking chief John Hourican and markets head Peter Nielsen, though they were not involved in rate-rigging
The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) (AMS:RBS)’s board is reportedly in the last phase of negotiations with British and U.S. regulators over the fines it must pay for allegedly rigging Libor interest rates. The bank is also considering the resignation of two senior executives to show the regulators that RBS is serious to clean up its act, two people familiar with the matter told the Wall Street Journal. It is yet to be seen whether RBS will be charged a similar amount as UBS AG (NYSE:UBS), which had to pay to the tune of $1.5 billion.
The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) (AMS:RBS) will try to prevent the kind of regulatory and public backlash that forced Barclays PLC (NYSE:BCS) to fire its chairman and chief executive, after its settlement with the regulatory authorities last year. So, RBS is considering removing its investment banking chief, John Hourican, and markets head, Peter Nielsen, (Of course, it needs somebody to put the blame on). Though Hourican and Nielsen were not involved in rate-rigging, it took place in the units they oversaw.
The U.K. Financial Services Authority is pushing Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) (AMS:RBS) to hold someone – anyone – accountable for the act. However, there is no evidence showing the involvement of these two executives in the scandal. By offering up the two senior executives, RBS CEO, Stephen Hester, can safely keep his job. Mr. Hester told the media recently that the bank is trying to reach a settlement before presenting its annual results in February 2013. People familiar with the matter said that RBS may reach a settlement by January 21.
The British government owns 81 percent stake in the Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) (AMS:RBS). Mr. Hourican, who took over the bank’s investment unit in late 2008, played a key role in restructuring RBS’s investment arm. His departure will be a big blow to the British bank. Nielsen has also been a big hitter. He became the global head of markets in 2009.
Earlier, Barclays PLC (NYSE:BCS) had been fined $450 million, and UBS AG (NYSE:UBS) was charged $1.5 billion to settle similar charges.