Libor Scandal: Rabobank To Pay £663m Fine

US and European regulators, including the UK's Financial Conduct Authority (FCA), have fined Dutch lender Rabobank a total of £663m over the Libor interest rate scandal.

As news of the settlement was announced, the bank's chief executive Piet Moerland confirmed he would resign with immediate effect - effectively carrying the can for Rabobank's actions despite the company insisting that no members of its top management were aware of wrongdoing.

Mr Moerland said he had been shocked by the evidence of manipulation, which included email trails.

One Libor submitter responded to one trader "Don't worry mate - there's bigger crooks in the market than us guys!" in one request for a high rate while an employee on the bank's money market desk in London told one dollar derivatives trader: "I am fast turning into your Libor *****!!!!."

Rabobank admitted at least 30 employees were involved in inappropriate conduct and it had taken "extensive steps" to strengthen controls relating to its benchmark submission processes - measures the FCA said were late to be implemented.

Libor, which stands for London Inter-Bank Offered Rate, is based on daily estimates of the rates at which a panel of banks borrow funds from one another.

The rate affects the value of financial products across the world including mortgages and  Rabobank is the fifth financial institution to have settled with regulators over the scandal to date.

The FCA said Rabobank's misconduct was among the most serious on Libor

Barclays paid just over £290m, Royal Bank of Scotland just over £390m and UBS 940m while London-based brokerage ICAP was fined £55m.

The FCA imposed £105m of the total fine against Rabobank, saying it had identified more than 500 instances of attempted Libor manipulation.

The FCA said it discovered "serious, prolonged and widespread misconduct" with poor internal controls encouraging collusion between traders and Libor submitters.

It claimed Rabobank did not fully address its failings until August 2012, despite assuring the FCA in March 2011 that suitable arrangements were in place.

Tracey McDermott, the FCA's director of enforcement and financial crime said: "Rabobank's misconduct is among the most serious we have identified on Libor.

"Traders and submitters treated Libor submissions as a potential way to make money, with no regard for the integrity of the market. This is unacceptable."

The FCA found evidence of manipulation and collusion involving at least nine manager and 19 other individuals worldwide between May 2005 and January  2011.

The watchdog said Rabobank allowed derivatives and money market traders to make, or influence others at the bank to make submissions that benefited trading positions linked to the pound, dollar and yen.

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