UK Chancellor wants RBS bankers to pay Libor-rigging fines and not taxpayers

In what could finally be the beginning of a change in how policymakers respond to bad banker behavior, George Osborne, the UK Chancellor, is arguing for RBS bankers paying the fine for rigging the Libor interest rate and not taxpayers.

Now that the principal that bankers should pay for their misdeeds is established, it makes sense to take the next step and have the bankers repay the taxpayers for all the taxpayer money spent cleaning up the financial crisis.

Yes, I realize that this will require the bankers to give up bonuses previously received and to forgo bonuses for the foreseeable future, but this is what they will have to do to repay the taxpayers.

As reported by the Guardian,

George Osborne has told bankers they must give up their bonuses to pay international fines imposed for the Libor rate-rigging scandal. 

The chancellor is understood to have "laid down the law" to state-backed Royal Bank of Scotland in recent days as it braces itself for a major penalty from US regulators. 

Senior RBS figures were warned that leaving taxpayers to cover the US penalty for the bank's role in fixing the lending rate, which governs the price of more than $500tn of loans and transactions around the world, would be "totally unacceptable". 

RBS is rumoured to be preparing to hold back some perks in preparation for the fines. The bank is thought to be close to reaching a deal with regulators in Britain, the US, Japan and Singapore and faces paying out an estimated £350m. 

A senior Treasury source said: "Fixing the Libor market is a symbol of all that went wrong with the banking system over the past 10 years. We are now putting those things right.

And one major step towards putting those things right is to have the bankers returning their bonuses from the last 10 years as part of their repaying taxpayers for the money that the taxpayers have had to spend dealing with the financial crisis.