Royal Bank of Scotland Group PLC says it is co-operating fully with an international probe into allegations it helped fix the benchmark interest rate Libor. Unfortunately, not everyone sees it that way.
According to the Competition Bureau of Canada, RBS isn’t co-operating at all.
In an unusual move Wednesday, the federal competition watchdog put out a news release to dispute statements RBS made to shareholders this month when it released third-quarter financial numbers.
In the bank’s management statement to shareholders, under the heading “Litigation, investigations and reviews,” RBS reassured shareholders that it was “co-operating fully with these investigations.”
Not so, said the Competition Bureau in Canada.
“The suggestion that the RBS Group is “co-operating fully” with the bureau is false. The RBS Group has not applied to the bureau’s immunity or leniency programs and, in fact, has challenged a production order issued by the Ontario Superior Court of Justice in relation to the bureau’s investigation,” the watchdog said.
The Competition Bureau is helping regulators in London probe allegations that several banks conspired to fix the Yen London interbank offered rate, or Libor. The bureau was asked by investigators in Europe to gather data from the subsidiaries of international banks operating in Canada, such as RBS, which help set Libor.
Libor, which is a survey of what the banks say is their cost of borrowing, is used to set interest rates for everything from bonds to credit cards and mortgages. More than a dozen banks are being probed for alleged rate-setting, which may have boosted profits. No charges have been laid in the investigation.
A few hours after the Competition Bureau issued its statement, RBS shot back at the regulator.
RBS can’t produce the documents the watchdog has requested because there is a risk that customer information would be disclosed, which would break privacy laws, the bank said.
“It is simply not accurate to imply that we do not want to co-operate with the Canadian Competition Bureau,” the bank said in its statement. “We have told the bureau that we want to provide the documents they are requesting, but that the mechanism they have chosen requires RBS to break laws in the U.K. To overcome this issue we have offered a number of alternative mechanisms, however, thus far, the b ureau have refused these offers. We have worked through this problem with other regulators and remain committed to co-operating fully with the CCB.”
The Competition Bureau must ask the British government to compel the documents to be produced, RBS said.
Executives at RBS, which is 81 per cent owned by the U.K. government, told reporters at a third-quarter earnings presentation that the bank wants to reach a settlement with regulators over the allegations.
“We are up for settling with all and everyone as soon as they are ready,” RBS chief executive officer Stephen Hester said in London. “But each regulator has to satisfy itself that it has all the facts.”
The Competition Bureau said it wanted to set the record straight “by correcting public statements” made by RBS.