Published October 05, 2012
LONDON – Royal Bank of Scotland has suspended a trader for attempting to manipulate a reference lending rate in Singapore, a person familiar with the matter told Reuters, showing the global spread of the scandal over setting rates such as Libor.
The part-nationalized UK bank put senior trader Chong Wen Kuang on leave earlier this year, the source said, for trying to manipulate the Singapore dollar swap offer rate (SOR).
Chong is the first trader known to have been suspended by RBS in relation to a rate other than Libor, widening the breadth of the lender's possible exposure to the global interest-rate rigging affair.
RBS declined to comment. Chong could not be reached for comment.
RBS said in August it had dismissed staff following an internal investigation into the setting of Libor and other interest rates. But did not give any further details of the individuals concerned or where they were based.
Barclays was the first bank to settle over the issue, paying record fines totaling 290 million pounds ($468.8 million) in June following investigations by U.S. and UK authorities.
Some analysts believe RBS could face an even greater punishment and several other banks could also be affected.
Reuters reported in July that RBS and Switzerland's UBS were two of the banks that had played a central role in the manipulation of rates.
RBS, which is 82 percent owned by the government following a bailout in 2008, likely wants to settle the matter quickly, partly to remove a threat to the value of Britain's stake in the bank. Taxpayers are sitting on a loss of 21.6 billion pounds after Britain pumped in 45 billion to rescue the bank.
Chief Executive Stephen Hester, who this week described RBS as a "British poster child for what went wrong in banking", has said RBS will "stand up and take any punishment" that comes its way following the Libor investigations.
RBS has said it is co-operating with governments and regulators in the United States, Britain and Japan and with competition authorities in Europe, the United States and Canada.
Singapore's central bank in July ordered banks in the city-state to review the way benchmark interbank borrowing rates are set, as regulators worldwide scrutinize the troubled system.
Ex-RBS trader Tan Chi Min has alleged in court papers that the bank's head of compliance Sim Suh-Ting had sent an email to senior manager saying it was acceptable for traders to make requests about the level at which the swap-offer rate was set.
($1 = 0.6186 British pounds)
(Reporting by Matt Scuffham; Additional reporting by Eveline Danubrata in Singapore; Editing by David Holmes)