Chief Executive Officer of the Royal Bank of Scotland (RBS), Stephen Hester, announced Friday that he gives up his bonus for this year, assuming the consequences of a disaster of the RBS computer systems that has affected millions of customers for over a week, according to AFP. Hester, who turned down under “enormous political pressure” the £963,000 ($1.51 million) bonus for 2011, indicated that this year he does not deserve and will not take the award. The announcement took place while RBS has been trying for over a week to get rid of the consequences of a computer problem which prevented most of the 15 million customers of the bank to withdraw cash or make transfers.
Hester acknowledged that there is currently a “high emotion” towards the financial services sector. He also confirmed that RBS is under investigation together with other big banks for attempting to manipulate Libor interest rates. “Bankers thought they were masters of the universe, when they were have been servants of th customers,” he said. These comments were made after the Bank of England Governor Mervyn King discussed the “culture” of the British banks, saying that “something went wrong and a real change is necessary.”
Another big British bank, Barclays, at the center of a scandal for manipulation of interbank lending rates, was fined 290 million pounds ($453 million); RBS is also one of the banks investigated, but, in a BBC interview, Hester didn’t want to comment on the Libor matter as the investigation is in progress. The lawsuit, started in March, will bring under scrutiny several banks for the fixing of the British interbank lending rates. The practice, known by the senior management members of RBS, was started during Fred Goodwin’s tenure as CEO.
British Financial Services Authority had already settled with four banks: RBS, HSBC, Barclays and LLoyds after finding enough evidence that they mis-sold financial products to protect businesses against a rise in interest rates.
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