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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Pladizow's picture

RBS: Ridiculously Blatant Scumbags!

Occident Mortal's picture

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

A spot fine?

SafelyGraze's picture

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


paul, jean-claude, stan fisher, and others



doomandbloom's picture

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

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...

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.


eatthebanksters's picture

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

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.

Liquid Courage's picture

Naw ... it was for the children.

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.

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 


(individual) [SDT].



Specially Designated Nationals and Blocked Persons List 

December 12, 2013 



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

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?

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.

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?

HoofHearted's picture

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

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

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.

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

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.

Critical Path's picture

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

Rainman's picture

As always , neither confirming or denying guilt.

XAU XAG's picture

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

PrecipiceWatching's picture




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....



Real Estate Geek's picture

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

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.



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.

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....

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...

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

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.

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".







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.

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!!!

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.

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

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.

Diogenes's picture

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

PrecipiceWatching's picture

I'm talking the inevitable fiscal armageddon.


That CLEARLY has NOT happened yet.

Shakes's picture

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

DavidC's picture

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

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


Dr. Engali's picture

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

NoDebt's picture

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

Herd Redirection Committee's picture

As are most legitimate costs of doing business.

Did I say legitimate?

Kirk2NCC1701's picture

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

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.  

DavidC's picture

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).