RBS: The Dumbest Bank Of 2013?

Tyler Durden's picture




 

The realization that RBS is not exactly populated by the sharpest tools in the shed first hit roughly two years ago, when its crack fixed income team was fined $1.9 million for not knowing the difference between Price and Discount, as was shown in the Dynegy CDS settlement auction. However, that episode was rocket surgery compared to what Bloomberg's Jonathan Weil uncovered, which rightfully prompted him to award RBS the "dumbest bank of the year" award for 2013.

From Bloomberg:

Back in 1999, after the notorious con man Martin Frankel went missing, federal agents found a partially burned to-do list at his mansion in Greenwich, Connecticut. Item No. 1 on the list: "Launder money."

Royal Bank of Scotland Group Plc might not have topped that one, but it came close enough to win this year's "Dumbest Bank of the Year" award. OK, that's not a real award, but it should be.

RBS, which is still government-controlled more than five years after taking a U.K. taxpayer bailout, will pay $100 million to federal and state banking regulators as punishment for using U.S. correspondent banks to conduct transactions with customers in Iran, Sudan and other countries subject to international sanctions. Often, violations of the law are difficult for banking regulators to establish, because the evidence tends to be gray and open to interpretation. That doesn't seem to have been a problem in this instance.

According to a consent order released today by the New York State Department of Financial Services, RBS provided employees at its payment-processing centers in the U.K. with written instructions, containing "a step by step guide on how to create and route U.S. dollar payment messages involving sanctioned entities through the United States to avoid detection."

Those instructions included this:

"IMPORTANT: FOR ALL US DOLLAR PAYMENTS TO A COUNTRY SUBJECT TO US SANCTIONS, A PAYMENT MESSAGE CANNOT CONTAIN ANY OF THE FOLLOWING: 1. The sanctioned country name. 2. Any name designated on the Office of Foreign Asset Control (OFAC) restricted list, which can encompass a bank name, remitter or beneficiary."

In other words, RBS explicitly told employees how to cover the bank's tracks. The consent order said the bank conducted $523 million of transactions from 2002 to 2011 through New York correspondent banks involving Sudanese and Iranian customers. It also said that RBS, to a lesser extent, processed U.S. dollar transactions for clients in Cuba, Burma and Libya.

After a dumb note like that, it's no wonder RBS did the smart thing and settled.

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Thu, 12/12/2013 - 11:40 | 4239606 Rory_Breaker
Rory_Breaker's picture

Wow, just wow!

Thu, 12/12/2013 - 11:49 | 4239619 Pladizow
Pladizow's picture

RBS: Ridiculously Blatant Scumbags!

Thu, 12/12/2013 - 11:49 | 4239642 Occident Mortal
Occident Mortal's picture

What would happen to me if I laundered money for Iran?

A spot fine?

Thu, 12/12/2013 - 11:56 | 4239659 SafelyGraze
SafelyGraze's picture

people need to stop using deprecated negative-connotation words like "laundering" when in fact they mean "clearing and settlement" instead

http://www.group30.org/rpt_12.shtml

hugs,
paul, jean-claude, stan fisher, and others

http://en.wikipedia.org/wiki/Group_of_30

 

Thu, 12/12/2013 - 12:21 | 4239753 doomandbloom
doomandbloom's picture

How much bonus will the bankers get? or else they might leave no?

Thu, 12/12/2013 - 12:40 | 4239860 HoofHearted
HoofHearted's picture

And yet nobody on here is asking whether a bank outside of the US should actually be subject to the US trying to strong-arm it...

I'm with Muhammad Ali on this one..."I ain't got nothing against them VietCong (or Iranians or Cubans)." In fact I've got friends that started out life in each of those countries. Why should they be punished for the dumb asses that are in charge? (And the same question applies to my situation in 'murica.) 

I know, I know...love it or leave it. I love what it once was. I love what Jefferson tried to make it into. I'm not loving the Clinton-Bush-Obama versions...

Thu, 12/12/2013 - 12:50 | 4239915 AGuy
AGuy's picture

"I ain't got nothing against them VietCong (or Iranians or Cubans)."

Wanna Bet that RBS was charging double digit processing charges for these transactions? I am sure RBS wasn't doing this to support freedom but out of pure greed.

 

Thu, 12/12/2013 - 14:28 | 4240375 eatthebanksters
eatthebanksters's picture

Makes Dimon's statement about being rich because he's smart look kinda stoopid...anyone is smarter than the RBS fuckers...

Thu, 12/12/2013 - 15:39 | 4240641 Imminent Crucible
Imminent Crucible's picture

"anyone is smarter than the RBS fuckers"

Hmm....not sure about that.  The RBS bailout was said to cost UK taxpayers the equivalent of US$69 billion.  Goldman Sachs has taken well over $800 billion so far from TAF, PDCF and CPFF alone.  JPM is closing in on that $69 billion just in litigation costs and fines to settle London Whales and Madoffs and MERS suits.  And there's lots more to come.

I think anyone is smarter than us Merikans that tolerate this crime syndicate of a government.

Thu, 12/12/2013 - 15:29 | 4240601 Liquid Courage
Liquid Courage's picture

Naw ... it was for the children.

Thu, 12/12/2013 - 11:58 | 4239666 NoDebt
NoDebt's picture

And that's why Jamie Dimon earns more money than you do, RBS.

London Whale?  Tempest in a tea pot.  Whodunnit?  No idea.  Just some rogue traders in the CIO division in London.  DID ANYONE EVER TELL JAMIE?  No, no, no... and even if they did, you can't prove it.

Thu, 12/12/2013 - 12:15 | 4239668 AlaricBalth
AlaricBalth's picture

 

They should update the list. This guy is dead (allegedly). Supposedly killed in Baghdad in 2002.

NIDAL, Abu (a.k.a. AL BANNA, Sabri Khalil Abd 

Al Qadir); DOB May 1937; alt. DOB May 1940; 

POB Jaffa, Israel; Founder and Secretary 

General of ABU NIDAL ORGANIZATION 

(individual) [SDT].

 

OFFICE OF FOREIGN ASSETS CONTROL 

Specially Designated Nationals and Blocked Persons List 

December 12, 2013 

http://www.treasury.gov/ofac/downloads/t11sdn.pdf

 

This guy is still alive though. ;-/

AL ASSAD, Bashar Hafez (a.k.a. AL-ASAD, 

Bashar; a.k.a. AL-ASSAD, Bashar; a.k.a. 

ASSAD, Bashar); DOB 11 Sep 1965; POB 

Damascus, Syria; President of the Syrian Arab 

Republic (individual) [SYRIA]. 

 

Isn't this guy dead as well?

BIN LADEN, Usama (a.k.a. BIN LADEN, Osama; 

a.k.a. BIN LADIN, Osama; a.k.a. BIN LADIN, 

Osama bin Muhammad bin Awad; a.k.a. BIN 

LADIN, Usama; a.k.a. BIN LADIN, Usama bin 

Muhammad bin Awad); DOB 30 Jul 1957; alt. 

DOB 1958; POB Jeddah, Saudi Arabia; alt. 

POB Yemen (individual) [SDGT] [SDT].

He is still on the list which was updated Dec. 12, 2013

Thu, 12/12/2013 - 16:14 | 4240740 Seize Mars
Seize Mars's picture

WTF!?

Thu, 12/12/2013 - 12:02 | 4239670 EscapeKey
EscapeKey's picture

Yeah, well, it's not like they broke any actual laws. You know, because as the politicians said - "technically didn't break any laws".

Oh hang on, they DID?

Thu, 12/12/2013 - 14:33 | 4240321 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Since you are not a banker is it a three spot fine.  You get two to the chest and one to the head.

Thu, 12/12/2013 - 16:19 | 4240752 Seize Mars
Seize Mars's picture

Mozambique drill?

Thu, 12/12/2013 - 14:18 | 4240342 Crash Overide
Crash Overide's picture

"What would happen to me if I laundered money for Iran?"

or for that matter lie to congress, or lie and steal from the country, or run guns, abandon the Americans in Benghazi, target political groups via the IRS, subvert the constitution daily, destroy the economy through the private FED bank, use the NSA to blackmail and provide insider trading to government officials, rig markets, plot regime change in other countries to destabilize, wars for pipelines, and opium, drones, NSA spying on everything, out of control military industrial complex, etc... fucking etc...

 

...and how have all these crimes been punished?

Thu, 12/12/2013 - 14:26 | 4240368 HoofHearted
HoofHearted's picture

Will all the bitchez in the U.S. finally join us in voting Libertarian?

Thu, 12/12/2013 - 11:55 | 4239655 aint no fortuna...
aint no fortunate son's picture

duh! care to bet they're not alone?

they're just the dumbest for getting caught and not having invested in the right regulators

Thu, 12/12/2013 - 15:48 | 4240382 Kirk2NCC1701
Kirk2NCC1701's picture

Retarded* Bankers of Scotland.

*FYI*... the original term "retarded" comes from clinical psychology, where it refers to "slow" or literally "late" mental development (from the French "retard", i.e. Late or Delay), and was not a derogatory term it has now become. 

So... in purely Clinical terms, I used the term correctly, even if it is now 'politically incorrect'**.  You learn something every day, eh?

** Even in my own (extended) family, there are a few members who are so attuned to political correctness, that although they grasp these concepts intellectually, they refuse to use or even hear such words, w/o getting upset at the emotional level. 

Clearly the emotional association/bond is so strong for certain "trigger words" for them, that the information never gets to their higher brain functions (logic & reason), or back from it.  I find this to be the case for many people, who respond to certain "trigger words" in VERY predictable manner -- either positive or negative manner.  Good politicians, PR and sales people know how to use this knowledge to amazing effect and success.

Do you know what YOUR "Trigger Words" are, that get you to respond reflexively (for or against something)?  I.e., words that allow others to manipulate you.  Think about it.

-K out.

Thu, 12/12/2013 - 20:22 | 4241652 RS2OOO
RS2OOO's picture

But if you work for them as I did up until they started getting big-headed with the ABN deal, they are:

Royal Bootcamp of Slavery

Thu, 12/12/2013 - 11:48 | 4239644 4realmoney
Thu, 12/12/2013 - 13:55 | 4240262 Bertie Bear
Bertie Bear's picture

Headquartered in Scotland. Run by megalomaniac Scot up to 2008. Bailed out by the English taxpayer who is still paying up for hese bozos.

Thu, 12/12/2013 - 11:41 | 4239614 Critical Path
Critical Path's picture

Just give them the civil fine they've already folded into their operating budget. 

Thu, 12/12/2013 - 11:41 | 4239616 Rainman
Rainman's picture

As always , neither confirming or denying guilt.

Thu, 12/12/2013 - 11:45 | 4239633 XAU XAG
XAU XAG's picture

Most of that fine is comming out of UK tax collected from the like of me!

Thu, 12/12/2013 - 11:43 | 4239622 PrecipiceWatching
PrecipiceWatching's picture

Dumb?

Corrupt?

Scheming?

Who the hell knows anymore? This crap gets more surreal and harder to fathom every day.  Why the heck hasn't the SHTF by now?

 

I'm leaning more and more heavily toward converting Fiat into Land.  Dirt is real.

Wish I had a Farmer in the family....

 

 

Thu, 12/12/2013 - 11:49 | 4239641 Real Estate Geek
Real Estate Geek's picture

You will soon. Whether that farmer is sufficiently proficient to feed his family is up to you.

Thu, 12/12/2013 - 12:46 | 4239684 PrecipiceWatching
PrecipiceWatching's picture

Hey RE Geek (or anyone):

A little perspective if you please.

 

I'm looking at 165 acres of mixed use land, about 25% already tilled, and the rest woods/hunting land.  Nice log cabin, with new small steel barn/workshop with well and electricity.

Is the current pricing for such properties at an historically low point like the rest of real estate?  Subtracting a reasonable cost for the buiildings this land is going for about 1.1 K per acre.

Again, not asking for persepctive on the specific pricing, just the general trend/historical context for valuation of semi-raw land.

 

Thanks.

Thu, 12/12/2013 - 12:57 | 4239952 Real Estate Geek
Real Estate Geek's picture

i could opine, but i don't want to BS you.  My area of expertise is commercial properties.  Primarily LA office & retail, so my opinion about land is coming from ignorance. I will say though that I would not contend that pricing in my sector is historically low. It's closer to the other end of the spectrum due to yield chasing. Sorry I can't be of assistance. For what it's worth, I wish I had a setup like you've described.

Thu, 12/12/2013 - 13:49 | 4240230 PrecipiceWatching
PrecipiceWatching's picture

Hey I appreciate your reply and honesty.

I'm trying to avoid buying at the top.

Thanks for your time.

 

LOL. Somebody downvoted my simple question.  Guess I asked it wrong....

Thu, 12/12/2013 - 13:58 | 4240278 youngman
youngman's picture

I would say that is a good price if you have water and electricity already....having trees is good too...if the land is fertile another plus..natural rainfall or do you need irrigation...what are the structures worth....is it a tough shed..10x10..or a 40x100 barn....big difference....lof cbins require upkeep...chinking and such...water is their enemy...they rot....you must have access as you have electricity....but with any real estate..it has to do with location..location..location...mountain land in Colorado and Montana is expensive...especially with water..Oklahoma not so much...

Thu, 12/12/2013 - 14:19 | 4240337 PrecipiceWatching
PrecipiceWatching's picture

Plenty of water-this is in the fertile midwest.  Not PRIME farmland but it has been tilled and used for crops.

 

From the photos, actually I think this is one of those low maintenance log constructions, not raw wood.  Auxillary building is new, steel, one level, looks to be about 20 x 30.  Might even have a concrete floor.

 

Thanks for the reply

Thu, 12/12/2013 - 14:29 | 4240376 HoofHearted
HoofHearted's picture

I'm here in the Midest, flyover country. A lot of people I know are looking for land, but there aren't many people looking in general. The price would be good in my neck of the woods. I know of at least five people that would jump on this if it were sufficiently away from "civilization."

Prices are at a low in these areas...but I predict they will get lower. If you have cash, you'll be in good shape. If you need a loan when those prices are lower, you'll be completely screwed.

Thu, 12/12/2013 - 14:47 | 4240430 PrecipiceWatching
PrecipiceWatching's picture

I would go 100% cash, and yes, I'm inclined to take a chance and see if this property gets reduced.  The current owner just recently "selectively harvested" the prime timber, so I'm working them over on that significant issue.

 

Sorry for the stupidity, but why would it be hard to get a loan, given the Fed dumping so much liquidity into the market?  My bank calls me at least once a month trying to loan me money to "finance my business purchases".

 

Thanks.

 

 

 

 

Thu, 12/12/2013 - 15:10 | 4240539 unemployed
unemployed's picture

Do some due diligence.  There are places where they have been burning properties of outsiders for over a hundred years.   High crop yields are incompatible with low productive soil.  So if you don't know much about farming you are headed for some hard lessons even if you are betting on a retrograde civilization.   This description is what pumpers/flippers do,  buy low,  sell off timber etc,  sell high.    Houses have to qualify to get a good mortgage,  like running water,  approved septic,  possibly built to building code,  3 or more bedrooms,  inspection with no sign of rot or insects,  good roof,  etc.    And I only know a little so keep asking them that do know.

Looks like unwanted tillable farm land is at least 4,000 an acre in iowa and illinois.

Thu, 12/12/2013 - 17:57 | 4241144 HoofHearted
HoofHearted's picture

If the land and house are depreciating assets, then the bank will want to have a HUGE down payment so that you don't dump the property on them when the value goes down. They want to assume zero risk of a loss. Since they have been burned by all the foreclosures *recently*, they remember this and will be less inclined to loan on a house.

Now, if you have a cash-producing business that has a lot of assets, and you are willing to list those assets as collateral, well...have we got a deal for you!!!

Thu, 12/12/2013 - 19:07 | 4241442 unemployed
unemployed's picture

 Especially if the bank can unilaterally call your loan and then sell what is left to a buddy...   Or if you are building,  the bank will make you use their designated contractor who owes them money and use your loan to make the bank good while the contractor defaults and you are left with nada.

Thu, 12/12/2013 - 14:50 | 4240454 just-my-opinion
just-my-opinion's picture

A saying in Real-Estate is a property is only worth what someone is willing to pay for it.

Give a low-ball offer and see how they react ( I don't know where the property is at)

$1000 an acre is a good price in most places but you are buying a large property so...you have room to negotiate

Thu, 12/12/2013 - 12:00 | 4239665 HelluvaEngineer
HelluvaEngineer's picture

Why the heck hasn't the SHTF by now

I'm pretty sure it's because 98% of Americans are complete imbeciles.  Fat, dumb, happy.

Thu, 12/12/2013 - 12:01 | 4239669 Diogenes
Diogenes's picture

The shit hit the fan 9/11/01. Are you just noticing the smell now?

Thu, 12/12/2013 - 12:07 | 4239695 PrecipiceWatching
PrecipiceWatching's picture

I'm talking the inevitable fiscal armageddon.

 

That CLEARLY has NOT happened yet.

Thu, 12/12/2013 - 11:46 | 4239627 Shakes
Shakes's picture

This was in the section of the employee manual titled, "Americans Don't Look at This Section"

Thu, 12/12/2013 - 11:46 | 4239629 DavidC
DavidC's picture

Fined $1.9 million on (illegal) transactions of $523 million?

That's just a discount (or is it a price)?

DavidC

Thu, 12/12/2013 - 11:59 | 4239660 Dr. Engali
Dr. Engali's picture

 I believe it's a line item in the budget as the cost of doing business.

Thu, 12/12/2013 - 12:02 | 4239671 NoDebt
NoDebt's picture

It's also tax deductible in many cases.  No joke.

Thu, 12/12/2013 - 13:17 | 4240055 Herd Redirectio...
Herd Redirection Committee's picture

As are most legitimate costs of doing business.

Did I say legitimate?

Thu, 12/12/2013 - 14:32 | 4240387 Kirk2NCC1701
Kirk2NCC1701's picture

Scotty, never mind tuning those Dilithium Crystals.
I got a new job for you...

Thu, 12/12/2013 - 16:19 | 4240751 FrankDrakman
FrankDrakman's picture

Dude.. the $1.9 million fine was on some other scandal, amount of dollars involved not stated. It quite clearly says in the article they paid a $100 million fine on the $523 million business.

Geez, average reading comprehension level and site popularity are apparently negatively correlated.  

Thu, 12/12/2013 - 16:41 | 4240827 DavidC
DavidC's picture

Frank,
My apologies, you're correct, I shouldn't have been so quick to post!

Nonetheless, <20% fine, it's still worth breaking the law if you only have to pay that amount and no one gets jailed (or gaoled of you want the English version).

DavidC

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