Dutch Rabobank braces for second-largest fine over Libor scandal

Reuters

AMSTERDAM, Oct 23 (Reuters) - Rabobank may face afine of roughly $1.0 billion over its alleged role in themanipulation of benchmark interest rates, the second-biggestpenalty in a global investigation.

Sources familiar with negotiations between the bank andU.S., UK and Dutch authorities said a final agreement on thesize of the fifth Libor-related penalty had yet to be reached,although a deal is expected within two weeks.

One source said the level of the fine being discussed wasaround $1.0 billion.

"Negotiations are ongoing," the source said.

Rabobank, Britain's Financial Conduct Authority, the Dutchcentral bank and the U.S. Commodity Futures Trading Commissiondeclined to comment. The U.S. Department of Justice did notimmediately respond to a request for comment.

U.S. and British authorities have already fined Barclays, UBS, RBS and broker ICAP around $2.7 billion over the manipulation of benchmark interestrates such as Libor (London interbank offered rate), whichunderpins more than $300 trillion of financial products.

Seven men have also been charged with fraud-related offencesin an inquiry that has become a symbol for the industry's greed.

Swiss bank UBS has faced the largest penalty to date. It wasordered to pay $1.5 billion last December and two of its formertraders, Tom Hayes and Roger Darin, have been charged with taking part in an alleged multi-year scheme to rig rates.

Hayes, who allegedly conspired with employees from more than10 financial institutions including Rabobank, and two formerbrokers from RP Martin are the first to face trial in Britain.

Two former Rabobank traders were suspended from MitsubishiUFJ Financial Group in 2012 after an internalinvestigation into the manipulation of interbank lending rates.

Rabobank, which once focused on lending to farmers, has beenculling branches and jobs to trim costs. In October, itabolished bonuses for its executive board members amid a publicoutcry over bankers' pay.

Rabobank has been among a handful of peers sued by privateindividuals and in class action civil suits in the UnitedStates, alleging it rigged dollar Libor, Euribor, Japanese YenLibor as well as the Tokyo Interbank Offered Rate (Tibor).

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