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| RBS investment banking head John Hourican to step down | RBS investment banking head John Hourican to step down |
| (about 5 hours later) | |
| The head of Royal Bank of Scotland's (RBS) investment banking arm is to step down over the Libor scandal, the BBC's Newsnight programme has learned. | The head of Royal Bank of Scotland's (RBS) investment banking arm is to step down over the Libor scandal, the BBC's Newsnight programme has learned. |
| John Hourican has been at RBS for 17 years and has led the investment banking division since late 2008. | John Hourican has been at RBS for 17 years and has led the investment banking division since late 2008. |
| Sources say he is being forced out even though most of the rate fixing happened before he assumed his current role. | Sources say he is being forced out even though most of the rate fixing happened before he assumed his current role. |
| Fines for RBS over Libor set to be announced on Wednesday, are likely to total hundreds of millions of pounds. | |
| The Financial Times was reporting on Tuesday night that the fines to be announced on Wednesday would amount to £390m ($615m) - somewhat less than the £500m that had been rumoured - and that the bank would face criminal charges against its Japanese subsidiary. | |
| Swiss bank UBS admitted to wire fraud charges against its Tokyo office as part of its $1.5bn settlement with international regulators in December. Barclays, the first bank to admit to its role in rigging Libor, paid a total of $450m. | |
| Sacrificial offering? | |
| Mr Hourican, who earned £3.5m for last year's work, will be stripped of his bonus for 2012, and of around £4m in bonuses due from previous years, in order to help pay the expected fines, most of which will have to be paid to American regulators. | |
| Mr Hourican is the highest profile casualty at the bank since it emerged last year that dozens of bankers had wilfully manipulated the key interest rate. | Mr Hourican is the highest profile casualty at the bank since it emerged last year that dozens of bankers had wilfully manipulated the key interest rate. |
| Libor, a daily average of borrowing costs announced by a panel of London-based banks, is used to calculate payments on hundreds of trillions of dollars-worth of financial contracts. | Libor, a daily average of borrowing costs announced by a panel of London-based banks, is used to calculate payments on hundreds of trillions of dollars-worth of financial contracts. |
| Sources speaking to Newsnight's business reporter Joe Lynam say that because Mr Hourican had no direct or indirect knowledge of the rate rigging, many within RBS regard his impending departure as a sacrificial offering. | Sources speaking to Newsnight's business reporter Joe Lynam say that because Mr Hourican had no direct or indirect knowledge of the rate rigging, many within RBS regard his impending departure as a sacrificial offering. |
| During his time in control of the investment banking division at RBS, Mr Hourican played a key role in returning the bank from the verge of total collapse to a near break-even point today, which could see it sold off by the UK government next year. | During his time in control of the investment banking division at RBS, Mr Hourican played a key role in returning the bank from the verge of total collapse to a near break-even point today, which could see it sold off by the UK government next year. |
| He oversaw a considerable shrinkage of the investment bank, with employee numbers cut by 10,000 to just 16,000, and a halving of the total size of the division's investments. | |
| The division is expected to be broken up into two new units, covering corporate advisory work and financial markets trading activities respectively. |