Libor scandal hits traders as RBS ‘cuts bonuses’

The state-backed bank has already warned traders that bonuses are likely to be slashed far more deeply than planned this year to pay the fine. Clawbacks have also been threatened if it is found that former awards were made out of inflated profits.

Banks have been instructed by regulators to rein in bonuses this year to build up a cushion of capital to cover potential fines and compensation for past malpractices. Barclays is also believed to be looking at clawbacks.

Dropping a heavy hint that lenders should trigger the rule, the Financial Services Authority has warned that “ex-post risk adjustment will be a major area of focus in our 2012 review of the firm’s remuneration policies”.

Read on.

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