Rabobank Settles Libor and Euribor Investigations
(Thomson Reuters ONE) -
Rabobank to take strong remedial measures
* Rabobank has entered into settlements with various authorities and agreed to
pay approximately EUR 774 million.
* Piet Moerland resigns with immediate effect as Chairman of the Bank's
Executive Board and is succeeded by Rinus Minderhoud on an interim basis.
* 30 Rabobank employees were in some way involved in inappropriate conduct.
* Rabobank did not sufficiently appreciate the risks associated with the Libor
and Euribor submission processes.
* The Executive and Supervisory Boards of Rabobank sincerely regret these
matters.
* Top management was neither involved in nor aware of inappropriate conduct.
* Rabobank took strong disciplinary action.
* Rabobank has launched a comprehensive package of measures to enhance
compliance, reduce risk and improve culture.
* Rabobank has taken extensive steps to strengthen systems and controls
relating to its interest rate benchmark submission processes.
* Rabobank will remain financially stable despite the payment of these
significant settlement amounts.
Rabobank today announced that it has entered into agreements with De
Nederlandsche Bank (DNB), the Dutch Public Prosecutor (DPP), the United Kingdom
Financial Conduct Authority (FCA), the United States Commodity Futures Trading
Commission (CFTC), the United States Department of Justice (DOJ) and the
Japanese Financial Services Agency (JFSA), in connection with their
investigations into Rabobank's historical London Interbank Offered Rate (Libor)
and Euro Interbank Offered Rate (Euribor) submission processes.
Rabobank has agreed to pay settlement amounts to the DPP, FCA, CFTC and DOJ
totalling approximately EUR 774 million[1].
Findings of the Investigations
* A number of employees inappropriately sought to influence certain Rabobank
Libor and Euribor submissions between 2005 and 2010.
* Some Rabobank employees also inappropriately communicated with employees at
other banks and brokers about certain Libor and Euribor submissions between
2005 and early 2011.
* In total, 30 employees were involved in, aware of, or should have been aware
of, the inappropriate conduct. Rabobank employs more than 60,000 people in
42 countries.
* During the period in which the inappropriate conduct occurred, Rabobank did
not sufficiently appreciate the risks associated with the Libor and Euribor
submission processes and did not have sufficient systems and controls in
place.
* None of the most senior or executive managers were involved in the
inappropriate conduct or were aware of it at the time. Nor did Rabobank
engage in 'lowballing' (i.e. the artificial suppression of Libor submissions
in order to present a more positive financial picture of the bank).
* Rabobank cooperated fully with all authorities, and the DNB, DPP, FCA, CFTC,
DOJ and JFSA specifically acknowledged Rabobank's cooperation.
Piet Moerland, Chairman of Rabobank's Executive Board, stated, "I sincerely
regret that a number of Rabobank employees acted in an inappropriate manner.
This should never have taken place at Rabobank. The conduct of these
individuals, and the language of some of the individuals' communications, has
shocked me. Rabobank fully understands the sense of indignation that this will
cause both within our organisation and more broadly. Such behaviour is entirely
contrary to our core values, of which integrity is the most important. The
public has to be able to trust that Rabobank employees operate with our core
values in mind. That is why I have today decided that, as a matter of principle,
it is appropriate for me to resign as Chairman of the Executive Board with
immediate effect."
"During the period in which the inappropriate conduct occurred, Rabobank did not
sufficiently appreciate the risks associated with the Libor and Euribor
submission processes, and we regret this. While that was an industry-wide
shortcoming, it in no way excuses the inappropriate conduct of a number of
Rabobank employees. Rabobank has now implemented robust systems and controls
relating to its interest rate benchmark submission processes. We have also
launched a series of measures which will further embed our core values and
cooperative corporate culture, reduce risks and enhance compliance oversight.
We have taken severe disciplinary measures against employees directly involved
in or otherwise responsible for the unacceptable conduct."
Wout Dekker, Chairman of the Supervisory Board, said, "I am deeply disappointed
that a number of Rabobank employees engaged in unacceptable conduct and that our
systems and controls were not sufficient to prevent this. I recognize the
substantial efforts made by the Bank and its Executive Board, in full
consultation with regulators, to investigate thoroughly our interest rate
benchmark submission processes. We have also improved our systems and controls,
both in relation to our submission processes and more generally. The
Supervisory Board will continue closely to monitor the implementation of the
comprehensive package of remedial measures that has been adopted."
Dekker noted that the inappropriate conduct occurred in the international
banking business and emphasized that no member banks were involved. Dekker also
stated, "Rabobank is, and always has been, a strong cooperative bank with values
of respect, integrity, sustainability and professionalism. I therefore support
the efforts within the Bank to further embed these values into our business
operations, in close consultation with DNB. The Supervisory Board has worked
together with the Executive Board to bring the Bank's remuneration structure
into alignment with these values."
"Rabobank is a strong and financially stable institution; the payment of these
significant settlement amounts does not change that. The Bank is committed to
learning the lessons from the past as we look towards the future."
Dekker added: "I understand the decision of our Chairman, Piet Moerland, to
resign immediately. I would have preferred that he continue to lead our
Executive Board but I have great respect for his personal decision. I want to
emphasize that neither Piet Moerland nor any other member of the Executive Board
had any involvement in these events."
Measures taken by Rabobank
* Rabobank has taken severe disciplinary measures against all of the employees
who engaged in inappropriate conduct and who were still at the Bank during
the investigation.
* Those employees who were involved in serious misconduct have had their
contracts of employment brought to an end. Other disciplinary action has
included, in different combinations, formal warnings, financial sanctions,
and the removal of managerial responsibilities. Bonuses have been partly or
entirely reclaimed for the period 2009-2012, in the total amount of EUR 4.2
million.
* Rabobank implemented systems and controls to govern its interest rate
benchmark submission processes that reflect industry best practices,
consistent with the most recent regulatory and banking industry guidance.
This includes a requirement that the Bank's submission processes be subject
to regular internal and external audits.
* A programme relating to conduct and culture, designed with the aid of
external experts, has been rolled out globally within Rabobank
International. This programme is aimed at enhancing the Bank's client-
centered focus and strengthening its emphasis on integrity and compliance.
A comparable programme relating to conduct and culture will be implemented
as soon as possible within Rabobank Nederland.
* Rabobank International has reviewed, and continues to review, business
activities within its Global Financial Markets division with an eye to
reducing risks, including compliance risks. As part of this project, the
Bank has already taken significant steps to discontinue certain product
lines and exit certain markets where appropriate.
* Rabobank also has made, and continues to make, significant investments to
strengthen its compliance, risk management and internal audit functions in
order to address certain deficiencies identified by authorities. This
effort, also undertaken with the assistance of external experts, includes a
focus on improving collaboration between risk management personnel at
Rabobank Nederland and Rabobank International, substantial increases in
compliance staffing and numerous structural enhancements to the Bank's
compliance function, and a review of its audit function with a focus on
ensuring that audit findings are addressed in a timely and effective
manner.
* Even though no members of the Executive Board were aware of, or involved in,
the inappropriate conduct, members of Rabobank's Executive Board have, as
the leaders of Rabobank, voluntarily forfeited their entitlements to
remuneration in an aggregate of EUR 2 million.
* Piet Moerland has also resigned as Chairman of the Executive Board with
immediate effect. Rinus Minderhoud, a member of the Supervisory Board of the
Bank since 2002, and an experienced banker and executive, has today taken
over as interim Chairman.
* Rabobank has also revised its approach to remuneration in order further to
de-emphasise a focus on financial targets.
DNB conducted its investigation with assistance of the Dutch Authority for the
Financial Markets. Rabobank has posted on its website (www.rabobank.com) the
letter from the DNB stating its findings. The detailed findings of the
investigations of the other authorities can be found on the websites of the
various regulators involved, or via the Rabobank website.
This announcement contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including those related to
Rabobank's regulatory capital and liquidity positions under certain specified
scenarios. In addition, forward-looking statements may include, without
limitation, statements typically containing words such as "intends", "expects",
"anticipates", "targets", "plans", "estimates" and words of similar import.
These statements concern or may affect future matters, such as Rabobank's future
economic results, business plans and current strategies. Forward-looking
statements are subject to a number of risks and uncertainties that might cause
actual results and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking statements.
Factors that could cause or contribute to differences in current expectations
include, but are not limited to: legislative, technological, fiscal, judicial,
and regulatory developments, exchange rate fluctuations, litigations (including
pending interest rate benchmark litigation), regulatory investigations
(including pending interest rate benchmark investigations), competitive
conditions, and general economic conditions. These and other factors, risks and
uncertainties that may impact any forward-looking statement or Rabobank's actual
results are discussed in the Interim Report 2013 Rabobank Group. The forward-
looking statements contained in this announcement speak only as of the date of
this announcement and Rabobank does not assume or undertake any obligation or
responsibility to update any of the forward-looking statements contained in this
announcement, whether as a result of new information, future events or
otherwise, except to the extent legally required.
--------------------------------------------------------------------------------
[1] Settlements per authority: DPP: EUR 70 million, FCA: GBP 105 million, CFTC:
USD 475 million and DOJ: USD 325 million.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Rabobank via Thomson Reuters ONE
[HUG#1738853]
Unternehmensinformation / Kurzprofil:
Datum: 29.10.2013 - 13:27 Uhr
Sprache: Deutsch
News-ID 310424
Anzahl Zeichen: 13632
contact information:
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