Daily Archives: November 25, 2012

‘Double strike’ fear for RBS over Libor fines

The Royal Bank of Scotland is concerned it could receive a “double hit” of separate fines for its alleged involvement in the Libor-fixing controversy, one from the Financial Services Authority and one from the US regulators on separate days.

Executives at the bank are understood to be preparing for “several days in the sun” of unwelcome publicity. Barclays was fined £290m on one day in late June by both the British and US watchdogs.

It is thought the settlement could come as early as next month. The bank’s chief exe­cutive, Stephen Hester, has said publicly he would be disappointed if the bank had not agreed a Libor settlement by the time of RBS’s full-year ­results in late February.

Although the Financial Services Authority (FSA) is still working with its US counterparts – the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) – towards a global settlement, sources indicated to The Sunday Telegraph that a piece-by-piece settlement appears increasingly likely.

It is understood that regulators within the FSA felt undermined by the Barclays settlement, which critics said showed the British watchdog to be considerably weaker than its US counterparts.

Read on.

BANKS UNDER FIRE FOR PRICES, TERMS OF FORCED INSURANCE

Advocates say lenders often get a cut of ‘excessive’ premiums banks choose to replace lapsedhomeowners policies.

An insurance controversy affecting hundreds of thousands of people in Florida and other states never touched Laura Digan’s world — until a $23,287.54 bill rocked it.

The “force placed” homeowners insurance imposed by her mortgage company after a policy lapsed was more than four times as expensive as prior coverage. The single mother of two in Palm Beach County said she was shopping for an alternative to last-resort insurer Citizens when the charge hit.

“I was absolutely appalled, horrified, shocked,” Digan said.

She questioned and contested it for months. Mortgage servicer Capital One agreed to reduce the charges days after The Palm Beach Post inquired, Digan said.

But regulatory and legal battles are only beginning to come to a head for a once-obscure part of theinsurance business that is attracting increasing scrutiny around the country. It has become a big moneymaker for the financial interests that benefit from it, producing $5.5 billion in premiums annually.

Rest here…