More swaps scandal: Royal Bank of Scotland is on deck in the Libor-rigging scandal, with reports that the bank will pay $233 million to settle the same type of manipulation charges that Barclays settled for $453 million earlier this week. Meanwhile, RBS, HSBC, Lloyd’s and Barclays agreed to compensate small- and mid-size businesses that bought interest-rate swaps from the bank, and to stop marketing certain types of derivatives to retail customers, following a settlement with Britain’s Financial Services Authority.
Europe rallies: Spanish and Italian bonds rallied after the first day of the European summit, after leaders agreed to hasten plans to create a single supervisor for euro-zone banks. That in turn would provide a mechanism for Europe to inject bailout funds directly into failing banks, although the new supervisor won’t be created soon enough for the coming Spanish bailout, in which the loans will go first to the nation’s balance sheet.
Walking around money: When JPMorgan let former chief investment officer Ina Drew retire last month, they allowed the executive in charge of the unit that generated the London Whale trading losses to walk away with $21.5 million in restricted shares and options. If the lender had fired her “with cause,” she would have forfeited those gains.
One day after The New York Times reported that losses from bank’s CIO could rise as high as $9 billion, Reuters is guessing $4 to $6 billion.
“Fix it!” The Securities and Exchange Commission could force Nasdaq to revamp its systems for developing and testing code used to process trades in initial public offerings.
Technically…A lawyer for Jerome Kerviel, the rogue trader responsible for a $6.1 billion trading loss for Societe Generale, said that Mr. Kerviel’s falsification of documents didn’t constitute criminal activity, because the documents “couldn’t fool” anyone. Mr. Kerviel, who is appealing a 2010 guilty verdict, also apologized to SocGen employees, and told the court he “never lied.”
Docked: Nomura chief executive officer Ken Watanabe will take a 50 percent pay cut over the next 6 months amid an insider trading probe into Japan’s largest brokerage.
Dried up: Stockton, Calif. became the largest U.S. city to file for bankruptcy yesterday, when it filed Chapter 9, though Reuters points out that Stockton lags Jefferson County, Ala. for the largest municipal bankruptcy by dollar amount.
Big gulp: Anheuser-Busch InBev will pay $20.1 billion to buy out Grupo Modelo, make of Corona.
Big move: C. Allen Parker will replace Evan R. Chesler at the helm of Cravath, Swaine & Moore.