Royal Bank of Canada is attempting to steer clear of the interest-rate fixing scandal that has engulfed Barclays Bank PLC.
Canada’s largest bank sent an e-mailed statement to media outlets Friday saying it has looked into its practices involving the key benchmark interest rate known as Libor, and has found nothing that is out of line with the rules laid out by British regulators.
The move comes after British bank Barclays admitted to manipulating data on its funding costs in an effort to rig Libor, which stands for London Interbank Offered Rate.
“We have determined that RBC acted in accordance with the British Bankers' Association requirement that our Libor submissions accurately reflected our perception of our cost of funds and that we did not collude with other banks,” the bank said in its public statement.
Libor is based on data provided by 16 banks about their funding costs, and it changes daily. It helps determine the pricing of other financial products, including more than $800-trillion (U.S.) of securities and loans, along with everything from credit cards to corporate bonds.
Barclays paid more than $450-million in fines after admitting to manipulating its Libor submissions in 2008. Swiss bank UBS AG has also co-operated with an investigation into the bid-rigging scandal, in exchange for immunity from criminal prosecution. The investigation has led British and U.S. regulators to probe the other banks involved in setting the rate, including RBC, Royal Bank of Scotland, Deutche Bank AG, Citigroup Inc., ICAP PLC and Lloyds Banking Group PLC.
Though the investigation has been going on for months, the situation worsened at Barclay’s this week with the sudden resignation of three of its top executives including CEO Robert Diamond. Chairman Marcus Agius and Canadian-born chief operating officer Jerry Del Missier also resigned due to the scandal.