Yahoo Finance RBS Told To Pay Libor Fine From Bonus Pot
Chancellor George Osborne wants any fine paid by the Royal Bank of Scotland (LSE: RBS.L - news) over the Libor scandal to come out of its bankers' bonuses.
RBS, which is majority-owned by the taxpayer, is expected to agree a fine of £400-500m next week with US and British authorities.
It is accused of attempting to rig benchmark interest rates.
Sky's City Editor Mark Kleinman said: "A Treasury source has told Sky News that the money that the US regulators will fine RBS will have to come out of the bank's bonus pot.
"It's very important politically, I think, for the Chancellor to be able to say that the taxpayer is not bearing the financial cost of misconduct by bankers who work for a company that is majority-owned by the taxpayer.
"The Treasury is obviously playing hardball on this, and we'll find out exactly how much RBS is going to be paying in fines in the coming days."
The Treasury expects the fines to be paid not just from the bonus pot for 2012 - likely to be around £250m - but money from future years' bonus pots as well.
RBS - which is 81% owned by taxpayers - is also looking to claw back up to £100m from pay deals previously awarded to executives in its investment bank.
The bank's remuneration committee, which is chaired by Penny Hughes, a non-executive director, is assessing plans for a "flat tax" on the pay packets of hundreds of directors and managing directors in its markets business.
The idea would involve about 15% of prior-year pay awards to the relevant individuals being clawed back, netting a total of as much as £100m.
"George Osborne is sending out a clear signal: 'You're paying for this, not us'," said Sky's Glen Oglaza.
"What the Treasury are saying is there won't be bonuses paid this year, but actually your bonuses are going to be clawed back not just this year but probably next year and the year after as well."
Barclays (LSE: BARC.L - news) was fined £300m last year for its role in the scandal.
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