The largest UK financial institution will pay $7m in fines and penalties over its role in the financial crisis.
Key points:The bank, Royal Bank of Scotland, admitted that it “did not take the appropriate steps” to detect that a trader had been colluding with an offshore broker, before it announced the settlementOn Thursday, Royal was fined $1.3bn and paid a $3.1m penaltyThe bank also agreed to sell its business to US-based investment fund Liberty Global, which will take over its assets and continue the bank’s recovery from the crisisThe UK’s financial regulator said that the bank will pay an additional $5.6m to the Financial Conduct Authority (FCA) in relation to the financial transactions scandal and to the Royal Bank’s compliance with the UK’s anti-money laundering laws.
The money will be used to help restore the bank to financial stability and to reduce its exposure to losses in the UK and other financial markets, it added.
The FCA, which oversees the banking sector, said that a “significant number of individuals” had been “inadvertently exposed” to the risks posed by the bank and the risks of other financial institutions.
It said that because of the complexity of the matter, the FCA could not discuss the fine amounts.
However, it was clear that the financial institution had been in a position of “inadequate” regulation and the FTA had not acted in a way which would “undermine the effectiveness of the law,” the regulator said.
“The regulator believes that the measures taken by the financial institutions were inadequate,” it said.
On Tuesday, it confirmed that Royal Bank had been fined a total of $1,717m for “serious breaches of financial laws and regulations”.
The FCTA is investigating the matter and will decide whether to bring charges against the bank, which has since been wound down.
The regulator said the settlement was made to protect “the public” and that it would not comment further.