LONDON — Rabobank announced on Oct. 29 that it has settled the investigations into its role in setting global benchmark interest rates, and it has been widely reported that the bank will pay $1 billion in criminal and civil penalties.

Rabobank is the latest lender to settle charges over the manipulation of the London Interbank Offered Rate (Libor). The settlement is the second-largest agreement after the $1.5 billion penalty imposed on UBS related to the interest-rate scandal.

Pat Moerland, executive board chairman, resigned immediately and was replaced with Rinus Minderhoud on an interim basis. Mr. Moerland joined the executive board in 2003 and has been chairman since 2009. He has been a member of the supervisory board since 2002.

“I understand the decision of our chairman, Piet Moerland, to resign immediately,” said Wout Dekker, chairman of the supervisory board. “I would have preferred that he continue to lead our executive board but I have great respect for his personal decision. I want to emphasize that neither Piet Moerland nor any other member of the executive board had any involvement in these events. The supervisory board has accepted Piet's decision with regret. Rabobank is grateful to him for his significant contribution to the bank during 10 years on the executive board. On behalf of the entire cooperative organization, I thank him for his dedication and expertise. I wish him all the best for the future.”

Rabobank said 30 employees were in some way involved in inappropriate conduct, and that it did not sufficiently appreciate the risks associated with the Libor and Euro Interbank Offered Rate (Euribor) submission processes.

Top management was not involved or aware of inappropriate conduct, the bank said, and it has taken strong disciplinary action. It has launched a comprehensive package of measures to enhance compliance, reduce risk and improve culture.

“I sincerely regret that a number of Rabobank employees acted in an inappropriate manner,” Mr. Moerland said. “This should never have taken place at Rabobank. The conduct of these individuals, and the language of some of the individuals’ communications, has shocked me. Rabobank fully understands the sense of indignation that this will cause both within our organization and more broadly. Such behavior is entirely contrary to our core values, of which integrity is the most important. The public has to be able to trust that Rabobank employees operate with our core values in mind. That is why I have today decided that, as a matter of principle, it is appropriate for me to resign as chairman of the executive board with immediate effect.”

Rabobank entered into agreements with De Nederlandsche Bank (D.N.B.), the Dutch Public Prosecutor, the United Kingdom Financial Conduct Authority, the United States Commodity Futures Trading Commission, the United States Department of Justice and the Japanese Financial Services Agency, in connection with their investigations into Rabobank's historical Libor and Euribor submission processes.

The investigation of Rabobank found that a number of employees inappropriately sought to influence certain Rabobank Libor and Euribor submissions between 2005-10. Some employees also inappropriately communicated with employees at other banks and brokers about certain Libor and Euribor submissions between 2005 and early 2011.

In total, 30 employees were involved in, aware of, or should have been aware of, the inappropriate conduct. Rabobank employs more than 60,000 people in 42 countries.

During the period in which the inappropriate conduct occurred, Rabobank did not sufficiently appreciate the risks associated with the Libor and Euribor submission processes and did not have sufficient systems and controls in place.

“I am deeply disappointed that a number of Rabobank employees engaged in unacceptable conduct and that our systems and controls were not sufficient to prevent this,” Mr. Dekker said. “I recognize the substantial efforts made by the bank and its executive board, in full consultation with regulators, to investigate thoroughly our interest rate benchmark submission processes. We have also improved our systems and controls, both in relation to our submission processes and more generally. The supervisory board will continue closely to monitor the implementation of the comprehensive package of remedial measures that has been adopted.”

He noted that the inappropriate conduct occurred in the international banking business and emphasized that no member banks were involved.

“Rabobank is, and always has been, a strong cooperative bank with values of respect, integrity, sustainability and professionalism,” he said. “I therefore support the efforts within the bank to further embed these values into our business operations, in close consultation with DNB. The supervisory board has worked together with the executive board to bring the bank’s remuneration structure into alignment with these values.”

Rabobank said it has taken severe disciplinary measures against all of the employees who engaged in inappropriate conduct and who were still at the bank during the investigation.

“We are also rolling out improvement programs, including behavioral and cultural programs,” Mr. Minderhoud said. “I see it as my priority vigorously to lead the implementation of these measures, especially in the interests of our customers in The Netherlands and abroad. The executive board is fully determined to have the core values — quickly — further embedded into all our business operations. I am fully confident that Rabobank will show resilience in the coming period and that all our clients, members and employees will again be proud of our bank. I will do my utmost to accomplish this.”

Those employees who were involved in serious misconduct have had their contracts of employment brought to an end. Other disciplinary action has included, in different combinations, formal warnings, financial sanctions and the removal of managerial responsibilities. Bonuses have been partly or entirely reclaimed for the period 2009-12, in the total amount of €4.2 million.

Rabobank implemented systems and controls to govern its interest rate benchmark submission processes that reflect industry best practices, consistent with the most recent regulatory and banking industry guidance. This includes a requirement that the bank’s submission processes be subject to regular internal and external audits.

A program relating to conduct and culture, designed with the aid of external experts, has been rolled out globally within Rabobank International. This program is aimed at enhancing the bank’s client-centered focus and strengthening its emphasis on integrity and compliance. A comparable program relating to conduct and culture will be implemented as soon as possible within Rabobank Nederland.