RBS Libor fine set at £390m

The regulators' fines - including £87.4m from the Financial Services Authority - are for the bank's part in the global rate-fixing swindle.

The rate, which averages out the level of market confidence shown by loan terms between banks, determines rates for derivatives and consumer and business loans worldwide.

But the figures are self-reported - and for years RBS staff instead colluded with their trader colleagues, falsely raising or lowering the figures hundreds of times in line with their trading positions.

CEO Stephen Hester said today that the scandal was "an extreme example of a selfish and self-serving culture which the whole banking industry is tagged with."

But campaigners for industry reform said the 20 other banks implicated - including Barclays - proved there was a "deep rot in the very fabric of the banking system."

Move Your Money's Laura Willoughby said the banks had indulged in "nothing short of kamikaze greed."

"Libor is the railroad tracks on which our banking system runs, RBS and other banks have shattered trust in the very foundations of our financial system.

"The rampant greed and dishonesty of RBS has forced small businesses to the wall and short-changed ordinary families," she said.

Meanwhile economic commentator Richard Murphy lambasted coalition plans to dump RBS back into the private sector.

"This bank needs to deliver state policy on lending, not pander to lowest common denominator market demands.

"That's how it got in the mess it's in."

Only full nationalisation could deliver what Britain needed, he said.