Feb 3 2013
Royal Bank of Scotland will reportedly face criminal charges and a £500 million fine for its alleged role in the Libor rate-rigging scandal this week.
The taxpayer-backed lender is likely to announce the settlement with the Financial Services Authority and American regulators on Wednesday, according to The Sunday Times, with the head of the group's investment bank, John Hourican, also expected to confirm his departure.
RBS - which is 81% state owned - is thought to be under pressure from the Government to pay the fine with cash from its bonus pot to ensure taxpayers do not suffer, but the report suggests traders are still set to receive bonuses worth hundreds of millions of pounds for 2012.
The lender is one of about 20 banks being investigated over involvement in manipulating the rate, which governs the price of more than 500 trillion US dollars-worth (£318 trillion) of loans and transactions around the world, including household mortgages.
RBS's fine is set to dwarf the £290 million settlement agreed by Barclays last year over its involvement.
American prosecutors, who have already charged two former employees of Swiss bank UBS over the scandal, are said to be keen to press criminal charges at RBS. UBS has already agreed a near £1 billion settlement with regulators.
It is understood the taxpayer-backed lender plans to announce a shake-up that will see its markets business split from its international banking division, which would pave the way for investment banking boss John Hourican to leave.
Mr Hourican is widely expected to shoulder the blame for RBS's alleged role in the interbank rate-rigging affair, although he is not believed to be directly implicated.
It is thought that Mr Hourican will not be replaced when the investment banking arm - which employs around 16,000 people - is broken up, with heads of the two new divisions instead reporting directly to chief executive Stephen Hester.
Mr Hourican has headed up RBS's wholesale bank since the group's bail-out at the height of the financial crisis and has already overseen a mammoth restructuring, with the division's workforce slashed by around 10,000. RBS declined to comment.