By Matt Scuffham
LONDON, Feb 5 (Reuters) - Royal Bank of Scotland willbe punished on Wednesday for its role in a global interest raterigging scandal, with fines of between 400-500 million pounds($783 million) expected.
The part-nationalised bank will be fined by authorities inBritain and the United States for the attempted manipulation ofthe London interbank offered rate (Libor) and other keybenchmark rates. Reports have said it could also face criminalcharges.
Chief Executive Stephen Hester has warned of a "miserableday" for the bank, with the contents of embarrassing emailcommunications exposing the extent of collusion between tradersset to be revealed.
The settlement comes with Britain's banks under intensescrutiny following a raft of scandals, which also include themis-selling of loan insurance and complex interest rate hedgingproducts and breaches of anti-money laundering rules.
Britain's Finance Minister George Osborne has already tappedinto the political sensitivity around the issue, saying thisweek that RBS's fines must be paid out of bankers' bonusesrather than from the pockets of taxpayers.
The revelations could put the future of RBS's investmentbank under renewed scrutiny and are likely to re-ignite callsfrom political factions who want the 81-percent state ownedlender to focus on its domestic market.
John Hourican, head of RBS's investment bank, is expected topart company with the bank following the settlement.
Taxpayers are currently sitting on a loss of about 15.7billion pounds after Britain pumped in 45.5 billion to keep thebank afloat at the height of the 2008 financial crisis.
RBS will be the third bank to settle with regulatorsinvestigating the affair. Its punishment will be greater thanthe $450 million fines paid by British rival Barclays but wellshort of the record $1.5 billion fines handed out toSwitzerland's UBS.
More than a dozen banks around the world have beenscrutinized by regulators as part of an investigation into thesuspected rigging of interbank rates, which are used to pricetrillions of dollars of financial instruments.
Barclays (BARC)