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Deutsche Bank fined record 2.5 bln USD for interest rate manipulation

Xinhua, April 24, 2015 Adjust font size:

Deutsche Bank agreed to pay a fine of about 2.5 billion U.S. dollars to U.S. and UK authorities for manipulating London Interbank Offered Rate (LIBOR) for years, said the U.S. Department of Justice (DOJ) on Thursday.

It is so far the sixth and largest settlement that resulted from regulators' long investigation into financial institutions' manipulation of the LIBOR, a leading benchmark interest rate used in financial products and transactions around the world. Deutsche Bank was a member of the panel of banks whose submissions were used to calculate the LIBORs for a number of currencies, including U.S. Dollar, Yen, Pound Sterling, Swiss Franc and Euro.

"For years, employees at Deutsche Bank illegally manipulated interest rates around the globe including LIBORs for U.S. Dollar, Yen, Swiss Franc and Pound Sterling, as well as EURIBOR (the Euro Interbank Offered Rate) in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank's counterparties," said Assistant Attorney General Leslie R. Caldwell.

"Deutsche Bank is the sixth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and today's criminal resolution represents the largest penalty to date in the LIBOR investigation," Caldwell said.

Deutsche Bank will pay penalties of 2.175 billion dollars to the DOJ, Commodity Futures Trading Commission (CFTC) and New York Department of Financial Services (DFS) as well as 226.8 million pounds (344 million dollars) to the U.K. Financial Conduct Authority (FCA).

The penalty marks the largest so far in the probe. In December 2012, UBS agreed to pay 1.5 billion dollars to settle the charges.

Deutsche Bank Co-Chief Executive Officers Jurgen Fitschen and Anshu Jain expressed regret for the fraud and admitted to the findings of the regulators, adding that no current or former member of its management board were found to have known about the rigging.

"We have disciplined or dismissed individuals involved in the trader misconduct; have substantially strengthened our control teams, procedures and record-keeping; and are conducting a thorough review of the Bank's actions in addressing this matter," they said in a joint statement.

So far, the DOJ has fined five other banks and charged 12 individuals as part of its investigation into LIBOR violations. Endite