Royal Bank of Scotland, part-owned by the UK taxpayer, expects to be punished for its role in the LIBOR-rigging affair that has already seen rival Barclays hit with fines totalling £290 million (around $456 million), according to RBS chief executive Stephen Hester.

"RBS is one of the banks tied up in LIBOR. We'll have our day in that particular spotlight as well," Hester told the Guardian newspaper in an interview that was issued on its website yesterday.

Hester did not comment on the size of any possible fine but said that the investigation by the Financial Services Authority, the UK regulator, was "in process."

"Even though when all the LIBOR (fines) are out most of it is going to be around the wrongdoings of a handful of people at a number of banks, those wrongdoings taint a whole industry beyond the handful of people and that makes it a huge problem,” Hester said.

In recent weeks, documents sent to regulators and in the US, and other comments reported in the media, suggest that a number of banks are implicated in manipulation of interbank interest rates going back several years.

Already, Barclays, the UK bank, has been rocked by the scandal, paying fines to US and UK authorities and seeing the resignation of high-profile CEO Bob Diamond. There is the possibility that banks will be hit with criminal prosecutions and class-action lawsuits from disgruntled investors.