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RBS investment boss to quit as £390m Libor fine looms

by Daniel Grote on Feb 06, 2013 at 07:46

RBS investment boss to quit as £390m Libor fine looms

Royal Bank of Scotland (RBS) investment banking head John Hourican is to quit as the banks’ £390 million fine for Libor fixing is set to be announced today, according to reports.

According to Sky News, Hourican will relinquish around £4 million of share options awarded based on past performance, and receive a year’s salary of around £700,000. It said the departure would follow political pressure for a prominent scalp from the bank following its involvement in the Libor scandal.

Hourican’s departure comes as the bank prepares to announce a settlement with regulators over its involvement in the global Libor-rigging scandal.

According to the Financial Times, the fine will total £390 million, including around £90 million from the Financial Services Authority, $150 million (£96 million) from the US Department of Justice and $325 million from the US Commodity Futures Trading Commission.

Sky said Hourican’s role was being made redundant by a restructuring of the investment banking division, and he was leaving despite regulators and the bank acknowledging he had no knowledge or involvement in Libor rigging.

RBS is expected to recoup the £300 million in US fines from investment banker bonuses. Business secretary Vince Cable will also today revive plans to privatise the bank by distributing free shares to the public, according to the FT.

Cable will argue the government should launch a giveaway of RBS securities that will allow voters to share in the upside of the bank’s share price above a predefined floor.

4 comments so far. Why not have your say?

Paul Barnard

Feb 06, 2013 at 09:00

It seems wholly unfair that some of these people, whilst clearly involved in illegal activities including fraud, can just walk away, whilst IFAs have no long-stop and can be pursued in their lifetime.

But then again, you never heard of an ex regulator or ex MP becoming an IFA did you........

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Barry Barnes

Feb 06, 2013 at 09:28

Mr Hourican may not have had any involvement or any knowledge re any illegal activities but one question could be 'should' he had noticed?

Another example of someone 'walking away' or 'resigning', where does the option to 'resign' come from? I have seen staff 'marched' out the out the office for considerably less. The only option then is to walk or get a bus home!

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Feb 06, 2013 at 09:34

People like Hourican should have asked 'why?'....why is it our Libor submissions are what they are? Why are we selling so much PPI? etc etc. They're supposed to challenge the activity underneath them not just oversee performance. It's called good governance!

He still gets £700k for walking away....not a bad nest egg is it, especially when it's the tax payer providing it when all said and done!

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Richard Hardy

Feb 06, 2013 at 11:11

These individuals in the Golden Circle will continue to receive massive payouts when leaving under a cloud until those responsible for regulating the industry wake up and realize these practices will only stop if those involved are held personally accountable and legal proceeding could result in a jail term.

There are those who will always have a go despite the threat of jail however the majority will toe the line if they know the punishment far outweighs the 'crime'.

Time for the FSA to deal with the real bandits in our industry.

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