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| Libor-rigging scandal: RBS chairman answers your questions | Libor-rigging scandal: RBS chairman answers your questions |
| (35 minutes later) | |
| The chairman of Royal Bank of Scotland will be appearing live on guardian.co.uk to answer readers' questions about the £390m fine the bank is paying to settle allegations it rigged Libor. The webchat will take place from 12.30pm GMT on 7 February. | The chairman of Royal Bank of Scotland will be appearing live on guardian.co.uk to answer readers' questions about the £390m fine the bank is paying to settle allegations it rigged Libor. The webchat will take place from 12.30pm GMT on 7 February. |
| Sir Philip Hampton is chairman of the bank which was bailed out in October 2008, eventually with a total of £45bn of taxpayer funds. | Sir Philip Hampton is chairman of the bank which was bailed out in October 2008, eventually with a total of £45bn of taxpayer funds. |
| He will answer questions about the £390m fine that regulators in the UK and the US have levelled on the bank for the rigging of the key benchmark rate which is used to set the rate of borrowing on £300tn of financial products around the world. | He will answer questions about the £390m fine that regulators in the UK and the US have levelled on the bank for the rigging of the key benchmark rate which is used to set the rate of borrowing on £300tn of financial products around the world. |
| Hampton, who was appointed chairman after the taxpayer bailout, has said that 21 of the bank's 137,000 staff were involved in the manipulation of Libor. In his formal response to the fine, he wrote: | Hampton, who was appointed chairman after the taxpayer bailout, has said that 21 of the bank's 137,000 staff were involved in the manipulation of Libor. In his formal response to the fine, he wrote: |
| We have to fix the culture in the banking industry. The most important part of that is focusing our efforts on the needs of our customers and acting with integrity. And it also involves facing up to the Bank's past failings, no matter how uncomfortable that is. That is why those responsible have left the organisation or been subject to disciplinary action. The Board has also used all means possible to ensure the gravity of this issue is reflected in the remuneration received by employees. No one should be left in any doubt about how seriously RBS takes these failings. | We have to fix the culture in the banking industry. The most important part of that is focusing our efforts on the needs of our customers and acting with integrity. And it also involves facing up to the Bank's past failings, no matter how uncomfortable that is. That is why those responsible have left the organisation or been subject to disciplinary action. The Board has also used all means possible to ensure the gravity of this issue is reflected in the remuneration received by employees. No one should be left in any doubt about how seriously RBS takes these failings. |
Please post your questions for the RBS chairman in the comments section below | Please post your questions for the RBS chairman in the comments section below |
| Sir Philip Hampton is live online and answering questions now | Sir Philip Hampton is live online and answering questions now |
| Hello, | Hello, |
| I'm online and will be answering questions now. I'm sure you will not hold back! | I'm online and will be answering questions now. I'm sure you will not hold back! |
| OmarSelim asks: | OmarSelim asks: |
| 1- do you dispute that rigging interest rate is a major crime that warrants criminal prosecution? 2- Do you accept that the buck stops with you in the LIBOR crime? 3- Do you believe you deserve the remuneration you are getting? | 1- do you dispute that rigging interest rate is a major crime that warrants criminal prosecution? 2- Do you accept that the buck stops with you in the LIBOR crime? 3- Do you believe you deserve the remuneration you are getting? |
| Sir Philip responds: | Sir Philip responds: |
| 1. If people break the law they should face the full weight of the criminal justice system. We have already seen traders at other banks arrested over LIBOR manipulation and I expect we will see more. That is how it should be. If people don't end up in prison over this scandal I worry it will further perpetuate the sense that there is one rule for the financial system and another set of rules for the rest of society. That's dangerous and it's wrong. In the case of former RBS traders the authorities now have plenty of evidence to look at and I expect they will be doing just that. If we can help them, we will. | 1. If people break the law they should face the full weight of the criminal justice system. We have already seen traders at other banks arrested over LIBOR manipulation and I expect we will see more. That is how it should be. If people don't end up in prison over this scandal I worry it will further perpetuate the sense that there is one rule for the financial system and another set of rules for the rest of society. That's dangerous and it's wrong. In the case of former RBS traders the authorities now have plenty of evidence to look at and I expect they will be doing just that. If we can help them, we will. |
| 2. I am the Chairman and the buck stops with me. That's one reason I'm here answering questions today. There is no doubt that mistakes have occurred on my watch and of course I regret that. In addition to the major physical restructuring of the bank - perhaps the biggest turnaround of its kind in the world - Stephen Hester and I certainly knew that cleaning up the culture of RBS needed to be a priority. Yesterday's settlement was painful evidence that the culture of a 150,000 person organisation cannot be turned around overnight. My view is that it's easy to come up with flashy statements on culture and whipping bankers into shape, but much harder to make the thousands of little changes that will be required to make a real difference. | 2. I am the Chairman and the buck stops with me. That's one reason I'm here answering questions today. There is no doubt that mistakes have occurred on my watch and of course I regret that. In addition to the major physical restructuring of the bank - perhaps the biggest turnaround of its kind in the world - Stephen Hester and I certainly knew that cleaning up the culture of RBS needed to be a priority. Yesterday's settlement was painful evidence that the culture of a 150,000 person organisation cannot be turned around overnight. My view is that it's easy to come up with flashy statements on culture and whipping bankers into shape, but much harder to make the thousands of little changes that will be required to make a real difference. |
| 3. my remuneration is set by other people according to market norms. It is high, but I don't think the pay for the RBS chairman has moved since 2006. | 3. my remuneration is set by other people according to market norms. It is high, but I don't think the pay for the RBS chairman has moved since 2006. |
| jamesgor asks: | jamesgor asks: |
| Do you see any connection at all between the cultural imperatives which lead to the libor fixing and your current total lack of focus on customer care in your high street banks? | Do you see any connection at all between the cultural imperatives which lead to the libor fixing and your current total lack of focus on customer care in your high street banks? |
| Sir Philip Hampton responds: | Sir Philip Hampton responds: |
| @jamesgor - We are hugely focused on customers in the high street and throughout our business. It's also true that customers have not been given sufficient attention by the banking industry, for many years. It's a key thing that needs to be fixed. It is linked absolutely to the Libor issues which again show scant regard to the interests of customers. | |
| Whitehatter asks: | |
| Will you ensure that taxpayers are protected from paying the fines levied due to the actions of RBS employees, and recover this money from bankers' bonus payments and salaries? | |
| Sir Philip Hampton responds: | |
| @Whitehatter - Taxpayers own the great majority of the shares in RBS which is another reason why we very much want to protect their interests. These fines are a big cost and we need to try to recover those costs. As very obvious place is from the more highly paid employees that we have. We plan to recover all of the money that will be paid to settle the US fines from pay. | |
| rosodave asks: | |
| Do you believe that at least some, if not all of the 21 people involved in the libor rigging should face criminal charges? You seem to be suggesting that having lost their jobs with your bank is sufficient punishment for their actions | |
| Sir Philip Hampton responds: | |
| As I've said earlier, anybody committing crimes should face the full face of the law. In business terms, certainly, these are serious crimes by any measure | |
| rosodave also asks: | |
| Are you comfortable with the fact that just one year's bonus paid to some bankers is more money than a nurse, teacher and even some doctors will make in a lifetime of dedicated hard work? | |
| Sir Philip Hampton responds: | |
| I've said many times that I think pay in banks is too high, especially investment banks. The bonuses are falling sharply now, especially at RBS. As a general rule however I think bonuses that are justified by strong financial results are much more understandable, where the banking industry has failed in recent years is that high pay is associated with poor financial performance | |
| defragmentation asks: | |
| Many of the problems (cultural as well as financial) experienced by banks have been caused by the move away from 'customer service' and towards 'shareholder value'--discuss | |
| Senior staff in banks should not hold shares (in any form) as this creates a conflict of interest when making business decisions-discuss | |
| Sir Philip Hampton responds: | |
| @defragmentation - You have to do both. You only get shareholder value in most businesses - especially banks - by making sure that your customer service and your products are up to scratch. It's not an either/or. But you are right that in recent years shareholder value - particularly short-term shareholder value - came to dominate banking strategy. I think this process is now being reversed. | |
| Bermondsey asks: | |
| Could you explain to the British public why 14 year old children are thrown into prison for 3 years for writing nonsense on Facebook and why someone looses their home and goes to jail for doing a nanny job while receiving £70 week in social security while Fred Goodman lives in his holiday home in Barbados for 3 months a year? Why have you not been sacked and arrested? | |
| Sir Philip Hampton responds: | |
| @Bermondsey - I've said before here that serious action should be taken against people who've committed serious crimes. RBS is not the law enforcer, but where we have sanctions in terms of firing people or removing financial incentives we have applied them in a very tough way. | |
| I completely understand that the financial (and other) harm that was done in the financial crisis is very painful for many people in the country. | |
| TheJoyOfEssex asks: | |
| Firstly, congratulations on having the cajones to face an obviously hostile crowd. | |
| My question - In the current economic climate how many staff do you think RBS would lose if you paid zero bonuses this year? | |
| Sir Philip Hampton responds: | |
| I absolutely understand the concern about high banker pay and I share it. But we also need to operate in a competitive commercial environment and we won't turn this bank around without having top quality people to do it. I think the risk to the bank of paying zero bonuses would be too great a risk to accept. | |
| MFV1037 asks: | |
| "We have to fix the culture in the banking industry." | |
| Since becoming Chairman in February 2009 what have you done to fix the culture at RBS? | |
| With the unprecedented fine that RBS have just been given, do you agree that you failed? | |
| Sir Philip Hampton responds: | |
| @MFV1037 - | |
| Culture change doesn't happen overnight. It takes a lot of work and it requires in many cases quite a lot of new people, but I'm satisfied that RBS is changing quite fundamentally. | |
| Central to this is putting customers front and centre of all our employees' minds, whether they be branch staff or currency traders. A bank that puts customers first wouldn't sell a PPI policy to a person who could never claim on it. It wouldn't allow people to take on a mortgage they couldn't afford. And a banker that puts customers first wouldn't cheat the interest rate system for their own benefit. This may sound like 'motherhood and apple pie', but it's fundamental. To achieve it we have to think about training; about incentives; about the products we should be offering and the products we need to stop offering; about the way we recruit people and the sort of values we want to promote. The list goes on. | |
| lorduxbridge asks: | |
| Just a little one from me. | |
| I was always given to understand traders were extremely well-qualified and intelligent individuals. | |
| Please review the standard of English exhibited here. | |
| I'd like to know how these chaps passed GCSE English, let alone 'made it' into a position of responsibility at a City firm. | |
| Sir Philip Hampton responds: | |
| @lorduxbridge - I hope your leg is better. Didn't you lose it in 1815? | |
| The language in some of the emails and messages that have been published is wretched, even allowing for the fact that these are effectively market traders and we all know that bad language happens in vigorous markets. But it's what it says about the culture rather than the grammar which is most disturbing. | |
| benj67 asks: | |
| How do you continue to justify continued your role in financing the Canadian tar sands, arguably a greater crime than the Libor scandal? | |
| Sir Philip Hampton responds: | |
| @benj67 - We haven't lent money to tar sands projects for at least four years. By the same token we stopped all association with businesses that make cluster bombs. We take these environmental and sustainability concerns extremely seriously. We do of course have extensive business dealings with major oil companies such as BP and Shell, and have done for many decades. |