Wednesday 18 October 2017

The issues that still beset Deutsche

Leo Kirch (C), former owner of the Leo Kirch Media Group (Photo by Johannes Simon/Getty Images)
Leo Kirch (C), former owner of the Leo Kirch Media Group (Photo by Johannes Simon/Getty Images)

KIRCH – Heirs to Leo Kirch's media empire accused Deutsche Bank of hastening its collapse.

The case appeared to have ended when Deutsche settled with the heirs in a deal costing the bank around €925m. But the Munich public prosecutor in March widened an investigation into suspicions of attempted fraud in connection with the case to include Stephan Leithner, management board member in charge of legal matters. Co-Chief Executive Juergen Fitschen is already under investigation.

CURRENCIES – Deutsche Bank has been questioned by regulators investigating possible manipulation of benchmark rates in the $5 trillion-a-day (€3.6trn) foreign exchange market.

LIBOR – EU antitrust regulators last year slapped a record €1.7bn penalty on six financial institutions including Deutsche Bank over attempts to manipulate the London interbank offered rate (Libor) and its euro equivalent Euribor. Deutsche was given the biggest fine of €725m.

LIBOR SUIT – US government-controlled mortgage company Fannie Mae sued nine banks in October including Deutsche, accusing them of colluding to manipulate interest rates and seeking more than $800m of damages.

DERIVATIVES – EU watchdogs charged 13 top investment banks, including Deutsche, last July with blocking exchanges' access to the lucrative credit derivatives market.

MORTGAGE-REPURCHASE DEMANDS – Deutsche and other banks face demands to buy back mortgage-backed securities. Clients who bought the securities say they were misled about quality of assets. Deutsche faced $5bn in repurchase demands at the end of 2013.

MORTGAGE-BACKED SECURITIES – Deutsche agreed to pay $1.9bn to settle claims that it misled Fannie Mae and Freddie Mac.

CARBON TRADING – Prosecutors have investigated 25 Deutsche Bank staff on suspicion of tax evasion, money laundering and obstruction of justice. Police and tax inspectors raided Deutsche Bank, arresting five staff for several days in an inquiry linked to a tax scam involving the trading of carbon permits.

MPS – Italian lender Monte dei Paschi di Siena reached a deal in December to close a loss-making derivative trade with Deutsche, and agreed to drop a related civil lawsuit. But in a letter published after the settlement, German financial watchdog Bafin accused Deutsche of misleading it over the trade with Monte dei Paschi and of falsely accounting for the deal, a newspaper reported.

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