London: The head of the Royal Bank of Scotland’s investment banking arm is to step down over the Libor rate-rigging scandal, British media reported.
John Hourican is to give up £4 million ($6.32 million, 4.65 million euros) in past share awards when he quits the state-rescued British bank, Sky News television reported.
The BBC quoted sources who said Hourican, who has been at RBS for 17 years, was being forced out even though most of the fixing happened before he took over as head of its investment banking division in late 2008.
His expected resignation comes as Dow Jones Newswires reported that RBS is to announce on Wednesday that it will settle its part of the scandal by paying US and British authorities up to £500 million ($780 million, 580 million euros).
The Libor, or London Interbank Offered Rate, estimates the rates at which banks lend money to each other and is used to calculate huge numbers of financial contracts around the world.
Last year, the Libor system was found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure, a scandal that has seriously damaged the reputation of the City of London financial centre.
Swiss bank UBS was the first bank to reveal problems in the rate-setting process, and two former UBS employees were charged in December when the group’s UBS Securities Japan unit settled similar allegations with US and British authorities for $1.5 billion, the biggest amount to date.
US Justice officials do not plan to charge individuals at RBS with crimes, Dow Jones said.
But the newswire said an RBS unit, possibly based in Asia, could plead guilty to a crime in the United States.
The British government owns more than 80 percent of the shares in RBS, owing to a massive £45.5 billion bailout of the bank during the global financial crisis.
There is considerable pressure in Britain for senior bank executives to take responsibility for the scandal.
Barclays bank agreed in June to pay around $450 million in connection with the affair, which led to the resignations of three Barclays senior board members, including chief executive Bob Diamond.
More than a dozen other institutions remain under investigation.
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