Japan's financial watchdog on Friday gave a slap on the wrist to the local arm of Royal Bank of Scotland over a rate-fixing scandal that saw the firm fined $612 million by UK and US regulators.
Despite noting that a local trader had played a part in the LIBOR rigging that has rocked confidence in the financial world and saying the actions "could undermine the market integrity", the regulator issued little more than a ticking off.
Japan's watchdogs are frequently criticised for lacking teeth and the Financial Service Agency's issuance of a business-improvement order -- an administrative punishment -- risks further undermining their credibility.
The FSA said an RBS Securities Japan (RBSSJ) trader, whom it did not name, had asked RBS yen LIBOR submitters to manipulate interbank lending rates in favour of his derivative transactions from 2006 to 2010.
"The conducts are acknowledged to be seriously unjust and malicious and have a serious problem from the viewpoints of the public interest and protection of investors," the agency said in a statement released in English.
The agency ordered the firm to submit a report on how it intends to improve its business operations by May 13.
In February, the British state-rescued banking group said it would pay fines totalling $612 million to US and British regulators to settle allegations of Libor interest rate rigging.
Libor, or London Interbank Offered Rate, is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money.
Libor is calculated daily, using estimates from banks of their own interbank rates, and affects the pricing of more than $300-trillion worth of contracts across the world, according to the British regulator.
But the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.
Immediately after Friday's announcement, RBSSJ said chief executive Ryusuke Otani was resigning from his post to take responsibility for the manipulation.
The company also said it would meet the deadline for the submission of its business improvement plan.
"RBSSJ apologises to its customers and all parties concerned for the issues that led to the Business Improvement Order," it said. "RBSSJ takes this matter very seriously."