Chancellor George Osborne has insisted that any fines imposed on the Royal Bank of Scotland over the Libor scandal must be met from bankers' bonuses.
It is thought that RBS could face fines of as much as £500m over its role in the Libor-rigging scandal.
Treasury sources indicated that the chancellor had made it clear that any financial penalty imposed by American regulators must be paid for by bankers, and not the taxpayer.
This could be achieved by either making deductions from future bonus awards or clawing back from previous years.
The state-backed bank was last month still in negotiations with UK and US regulators over what it should pay out over alleged fixing of the interbank lending rate.
An agreement with authorities on both sides of the Atlantic would allow RBS to settle the matter before its full-year financial results later this month.RBS has already warned traders that bonuses are likely to be slashed far more deeply than planned to pay any fine.
A fine in the region of £500m for RBS would be below the £930m agreed by the Swiss bank UBS but higher than the £290m fine imposed on Barclays, the first bank to admit its failings with Libor.
Libor is a benchmark interest rate used in transactions worth $500 trillion (£310 trillion) globally.
telegraph.co.uk
It is thought that RBS could face fines of as much as £500m over its role in the Libor-rigging scandal.
Treasury sources indicated that the chancellor had made it clear that any financial penalty imposed by American regulators must be paid for by bankers, and not the taxpayer.
This could be achieved by either making deductions from future bonus awards or clawing back from previous years.
The state-backed bank was last month still in negotiations with UK and US regulators over what it should pay out over alleged fixing of the interbank lending rate.
An agreement with authorities on both sides of the Atlantic would allow RBS to settle the matter before its full-year financial results later this month.RBS has already warned traders that bonuses are likely to be slashed far more deeply than planned to pay any fine.
A fine in the region of £500m for RBS would be below the £930m agreed by the Swiss bank UBS but higher than the £290m fine imposed on Barclays, the first bank to admit its failings with Libor.
Libor is a benchmark interest rate used in transactions worth $500 trillion (£310 trillion) globally.
telegraph.co.uk
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