Libor scandal: RBS fines expected to total £400m
Royal Bank of Scotland (RBS) is expected to be fined a total of about £400m ($625m) by UK and US regulators later as a result of the Libor scandal.
The head of RBS's investment banking arm since 2008, John Hourican, is also expected to step down.
However, there is no suggestion he was involved in the scandal.
RBS is accused of colluding with other banks to rig Libor rates during the global financial crisis. Barclays and UBS have already received fines.
Speaking to the BBC, Business Secretary Vince Cable said the government had made it clear to RBS that the fines should be paid from staff bonuses, saying that neither taxpayers nor bank customers should bear the cost.
The government has an 81% stake in RBS following the part-nationalisation of the bank during the financial crisis.
"The problem is that these are global banks and if they've committed breaches of the law in the US they have to be punished accordingly," Mr Cable told BBC Radio 5 live. "It is absolutely galling for UK taxpayers to be asked to stump up for it."
But he acknowledged that the government could not force RBS to act, despite its majority stake.Settlement talks
In a statement released on Wednesday morning, RBS said it was still in "late-stage settlement discussions" with US and UK authorities over "potential settlements".
"Although the settlements remain to be agreed, RBS expects they will include the payment of significant penalties as well as certain other sanctions," the bank said.
Those discussions are taking place with the Financial Services Authority in the UK, the US Commodity Futures Trading Commission and the US Department of Justice.
The greater proportion of the fines are expected to be imposed by the US authorities.
Swiss bank UBS admitted to wire fraud charges against its Tokyo office as part of its £940m settlement with international regulators in December.Continue reading the main story
Barclays, the first bank to admit to its role in rigging Libor, paid a total of £290m.
It is not clear if RBS bankers will face criminal charges, but the Serious Fraud Office in the UK is continuing an investigation into the wider scandal.
Mr Hourican, who earned £3.5m for last year's work, is expected to lose his bonus for 2012 along with his position as head of RBS's investment bank. He is also expected to forego £4m of bonuses from previous years.
In a memo to RBS staff on Tuesday, the bank's chief executive Stephen Hester called the Libor scandal "the biggest disappointment of our legacy and clean-up job to date".
He said he would not be "ducking difficult questions" relating to the scandal, and would ensure that "wrongdoers have been punished".
He added that the bank must accept the close scrutiny that came with government ownership.
In a speech to journalists on Wednesday morning, Mr Cable said the prospect of selling the government's stakes in RBS and Lloyds back to the private sector now looked like "a distant dream".