October 15, 2012 / 4:08 PM / 8 years ago

RBS suspends senior trader in Libor probe: source

LONDON (Reuters) - Royal Bank of Scotland (RBS.L) has suspended a senior rates trader as part of an internal probe into the setting of Libor and other interest rates, a person familiar with the matter told Reuters.

A logo of an Royal Bank of Scotland (RBS) is seen at a branch in London February 23, 2012. REUTERS/Stefan Wermuth

The part-nationalized British bank suspended Jezri Mohideen,

head of rates trading for Europe and the Asia-Pacific region, on October 12, the source said on Monday.

Mohideen could not be reached for comment despite several attempts to contact him. Calls to his work phone were forwarded to the RBS press office.

RBS declined to comment on Mohideen’s employment status but said it was continuing to co-operate with regulators.

“Our investigations into submissions, communications and procedures relating to the setting of Libor and other interest rates are ongoing. RBS and its employees continue to cooperate fully with regulators,” it said.

RBS said in August it had dismissed staff following an internal investigation into the setting of Libor and other interest rates.

Barclays (BARC.L) was fined $450 million by U.S. and UK regulators in June for manipulating Libor - the London Interbank Offered Rate - and is the only bank to have settled. Some analysts believe RBS could face an even greater punishment.

RBS is facing a delay in reaching a settlement over its role in the Libor scandal because of difficulties agreeing a deal with all the regulators involved, finance industry sources told Reuters earlier this month.

Britain’s top financial watchdog in September delivered a 10-point plan to overhaul Libor but stopped short of scrapping the benchmark interest rate. The FSA’s plan marked the first concrete step by regulators to repair a system discredited by the rigging scandal.

RBS, which is 83 percent owned by the taxpayer, is eager to draw a line under the affair and refocus attention on its recovery. The bank was partly nationalized during the financial crisis in a 45 billion pound rescue by the UK government.

One former RBS trader discussed Libor fixing with traders from other banks and described the process as a cartel, according to court documents cited by Bloomberg.

RBS suffered another blow on Friday when Spain’s Santander pulled out of a deal to buy 316 branches that it had been required to sell under EU state aid rules.

Shares in RBS were down 1.1 percent to 260 pence at 1505 GMT, meaning UK taxpayers are currently sitting on a loss of 21 billion pounds.

Thomson Reuters (TRI.TO), parent company of Reuters, has been calculating and distributing Libor rates for Libor’s sponsor, the British Bankers’ Association, since 2005. (Editing by David Cowell)

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