Read Haig's discussion with BBC Radio Scotland's Waseem Zakir on 30th January, 2013:

WASEEM ZAKIR
Let me tell you about a massive, massive fall in the price of RBS shares yesterday, around £1.3billion was wiped off the value of the bank after shares fell by 6%. The reason was the fines and penalties RBS might have to accept for its part in the Libor rate-rigging scandal. Reports emerged from America yesterday afternoon that regulators there were pushing for RBS to accept criminal liability as well as a fine for fixing Libor. Of course, RBS would much rather pay the fine and not accept criminal liability. Let's talk about this and other market happenings with Haig Bathgate, Chief Investment Officer at Turcan Connell. Good morning to you, Haig.

HAIG BATHGATE,
Morning, Waseem.

WASEEM ZAKIR
It goes without saying that pleading guilty to any criminal offence is a serious business but how much of an issue does it become for a bank?

HAIG BATHGATE

Well, I think it is a big issue, I mean obviously RBS are quite keen to draw a line under this, the fine is obviously very significant that they are talking about, estimated to be in the region of £500million, but obviously they are reluctant, as you say, to plead guilty to criminal charges because if they do so this opens the doors to future litigation, which means that they can't draw a line under it.

WASEEM ZAKIR
Is there a neat solution for RBS in all this?

HAIG BATHGATE
It's not clear at the moment, it looks as though the US authorities are pushing for them to do this through some sort of offshore subsidiary, so we need to see what the implications of that are, whether that limits the liability, but at the moment we wait see more information.

WASEEM ZAKIR
Offshore subsidiary, because one of the other banks who were fined quite heavily pleaded guilty and they said,"well, it all happened in some subsidiary somewhere else", so if there are any consequences, lawsuits and so on, they're directed to that subsidiary.

HAIG BATHGATE
Yes, it would appear so, it appears that initially they're going to focus on the Singapore operations of the Royal Bank of Scotland for this.

WASEEM ZAKIR
Okay. Well, we're expecting an announcement this week or next week, depending on how the talks go with the American regulators. Let's talk about America - yesterday we had some really interesting economic data come out from there. We had house prices and at the same time we had consumer confidence both going in the opposite direction - house prices going up, consumer confidence going down - why is consumer confidence so important for the American economy?


HAIG BATHGATE
Yes, well, consumer confidence is really important, the US economy is 70% driven by consumption, so it is one of the most important factors and, as you say, there was conflicting economic data out yesterday where consumer confidence was down and house prices were moving up. It's quite hard to work this out, consumer confidence can be quite fickle, it could be a legacy of the end is nigh kind of talks that were around the fiscal cliff issues but also we had...as a result of the fiscal cliff negotiations there was a 2% increase in the tax rate alone on payroll, so it could just be consumers taking stock and seeing what's happening to their monthly incomings after that increase in tax.

WASEEM ZAKIR
And, of course, if the American consumer is feeling good and spending money that is good news for us here and elsewhere in other economies as well because we're going to sell those goods to them.

HAIG BATHGATE
Absolutely, yes, the US is, whether we like it or not, still the largest economy in the world and the thing that we were looking at, certainly yesterday, was the Case-Schiller index of house prices which were up in 19 of 20 cities, which is very good, it's good for the economy and for employment numbers.

WASEEM ZAKIR
Haig Bathgate from Turcan Connell, thank you very much for your time.

Click here to listen to the show in full.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.