RBS managers said to condone Libor rate manipulation

Bloomberg reports that the manipulation of Libor at RBS was not confined to a handful of individuals, but rather was condoned by management.  In addition, Bloomberg reports that condoning manipulation was embraced by the industry and not just a rogue firm or two.

Based on this report, there can no longer be an excuse for any bank not to be required to provide ultra transparency and disclose on an ongoing basis its current global asset, liability and off-balance sheet exposure details.

It is only when banks are subject to this level of transparency that sunlight can act as a disinfectant and clean up the bad behavior at each of the banks.

Clearly there is a need to change from an industry-wide culture of bad behavior that is supported by opacity to a culture of don't do anything today you wouldn't want on the front page of the paper tomorrow that is supported by a level of transparency that makes appearing on the front page of tomorrow's paper possible.

Royal Bank of Scotland Group Plc managers condoned and participated in the manipulation of global interest rates, indicating that wrongdoing extended beyond the four traders the bank has fired. 

In an instant-message conversation in late 2007, Jezri Mohideen, then the bank’s head of yen products in Singapore, instructed colleagues in the U.K. to lower RBS’s submission to the London interbank offered rate that day, according to two people with knowledge of the discussion. No reason was given in the message as to why he wanted a lower figure. The rate-setter agreed, submitting the number Mohideen sought, the people said. 

Mohideen wasn’t alone. RBS traders and their managers routinely sought to influence the firm’s Libor submissions between 2007 and 2010 to profit from derivatives bets, according to employees, regulators and lawyers interviewed by Bloomberg News. 

Traders also communicated with counterparts at other firms to discuss where rates should be set, one person said. 

“This kind of activity was widespread in the industry,” said David Greene, a senior partner at law firm Edwin Coe LLP in London. “A lot of the traders didn’t consider this behavior to be wrong. They took it as the practice of the trade. This is how things operated, and it seemed harmless.”