UTRECHT, Netherlands, Oct. 29 (UPI) — The largest Dutch bank, Rabobank, has agreed to pay $1 billion to settle charges of manipulating benchmark lending rates, authorities said.
The settlement involves the U.S. Justice Department, the Commodity Futures Trading Commission, the Financial Conduct Authority in Britain, the central bank and public prosecutors office in the Netherlands, and the Financial Services Agency in Japan, The Wall Street Journal reported Tuesday.
The bank was accused of manipulating the London interbank offered rate, which is an average lending rate that banks charge each other for loans, and a similar rate set in euros, the Euribor, which are used as benchmarks for trillions of dollars of personal and commercial loans.
A small manipulation of either rate can have enormous consequences in the marketplace and can mean handsome profits at individual banks, depending on specific transactions.
Rabobank is the fifth bank to reach a rate manipulation settlement. Bank Chief Executive Officer Piet Moerland will resign and be replace on an interim basis by Rinus Minderhoud, a bank executive.
Several executives left British bank Barclays when it became the the first bank to reach a settlement related to Libor manipulation. Since then, top level executives have been able to avoid losing their jobs although some bank managers have been dismissed and several have been charged with crimes.
Attorneys for Paul Robson, a Rabobank trader in London and one of approximately 30 Rabobank employees implicated in the case, was in talks with the Justice Department regarding charges, the Journal said.