A settlement between UK bank Royal Bank of Scotland (RBS) and authorities regarding the investigation into attempted LIBOR-fixing may be announced in the next few months.
The interest-rate rigging scandal that led to numerous resignations on fellow lender Barclays's board - including Chief Executive Officer (CEO) Bob Diamond - may prompt politicians to pressure RBS's CEO, Stephen Hester, into leaving, The Wall Street Journal reported on Tuesday.
Due to the government's 83% stake in RBS, UK authorities have been put in a awkward position: they need to get tough on banks that do not follow rules, but also should consider the value of their shareholding.
The paper cites analyst Shailesh Raikundlia from Espirito Santo as saying: "If Hester were to leave, we think it would definitely affect the share price, and the government is probably very aware of that."
Hester, who joined the bank as CEO in 2008 when the bank was bailed out by the government, is seen as responsible for turning the group around, trimming its toxic balance sheet and cutting losses.
Speaking to The Guardian on Sunday, he said: "RBS is one of the banks tied up in Libor. We'll have our day in that particular spotlight as well."
RBS's first-half results are expected on Friday.
Shares were trading 3.92% lower at 213.5p on Tuesday afternoon in London.
The recent bullish mood on equity markets quickly faded on Thursday as mixed messages from the Federal Reserve and a slowdown in China sparked a heavy sell-off on the FTSE 100, which lost more than two per cent of its value. [Thu 16:20]
Growth concerns hammered markets across the globe on Thursday, with banking and mining stocks bearing the brunt of the sell-off in London as the impressive year-to-date rally ran out of steam. [Thu 15:12]
Authorities attempts to create a challenger to the main established lending groups - RBS, Lloyds, Barclays, HSBC - are in a state of disarrray after Moody´s six notch downgrade of Co-op last week. Simply put, creating a large new lender is far more difficult and risky than many appreciate. In any case, the fact remains that the sector´s main players continue to dominate the current account market, of which they still possess over 70 per cent. The lesson to be drawn from the [14 May '13]
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