LONDON (Reuters) - Royal Bank of Scotland (RBS.L) will pay a $85 million (£67.98 million) penalty to resolve civil charges that it attempted to manipulate a global benchmark for interest rate products, U.S. derivatives regulators said on Friday.
The case against RBS, brought by the Commodity Futures Trading Commission, was the latest in a series of broad investigations into manipulation by big banks of a variety of global benchmark rates.
Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the “ISDAFIX” benchmark for their own gain from at least 2007 to 2012.
“This is an example of past misconduct that has no place at RBS,” RBS Chief Executive Ross McEwan said in a statement. “These findings make for uncomfortable reading and we have already taken significant steps to make sure this kind of behaviour cannot happen again.”
ISDAFIX rates are used to help value the cash settlement of options on interest rate swaps and other products. Pension funds and local governments often rely on products priced off the benchmark rate to help hedge against future interest rate changes.
To date, the CFTC has imposed penalties of $570 million for rigging the ISDAFIX benchmark.
Reporting By Andrew MacAskill; editing by Carolyn Cohn