UK bank scandal spreads, gets costlier

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UK bank scandal spreads, gets costlier

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Royal Bank of Scotland is reportedly set to be fined 186 million euros for the same Libor interbank interest rate rigging scandal that has hammered Barclays.

The British regulator, the Financial Services Authority, said four banks — Barclays, RBS, HSBC and Lloyds — will have to pay compensation to customers because they mis-sold products to protect small businesses against a rise in interest rates.

Compensation could run into the hundreds of millions of pounds, lawyers have said.

The FSA said from 2001 to date, banks sold around 28,000 interest rate protection products to customers, although it did not did not say how much it would cost the banks.

A string of mis-selling cases has rocked the financial services industry for over two decades, including for loan insurance.

The Libor mis-selling scandal is expected to draw in many banks globally.