Thursday 14 November 2019

Deutsche Bank hit with record fines of €2.3bn

The headquarters of the Deutsche Bank in Germany
The headquarters of the Deutsche Bank in Germany

Kirstin Ridley and  Karen Freifeld

US and British regulators fined Deutsche Bank $2.5bn (€2.3bn) and its British subsidiary pleaded guilty to criminal wire fraud yesterday as it became the eighth financial group to settle allegations of rigging interest rate benchmarks.

The record penalty in a seven-year investigation that has shredded the banking industry's reputation takes the total fines imposed on some of the world's top financial institutions to more than $8.5bn (€7.9bn). Twenty-one traders and brokers face criminal charges.

US regulators fined Germany's largest bank $2.175bn (€2.012bn) and British watchdogs imposed a £227m (€3 16m) penalty for its role in a scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin.

The rates are benchmarks for hundreds of trillions of dollars of financial products and loans worldwide.

Britain's Financial Conduct Authority (FCA) said the misconduct involved at least 29 Deutsche Bank individuals including managers, traders and submitters based mainly in London but also in Frankfurt, Tokyo and New York.

It accused Deutsche Bank of inadequate systems and controls, failing to provide timely, accurate information and misleading the UK watchdog by claiming its German regulator BaFin had prevented it from sharing a report, when this was untrue.

The New York State Department of Financial Services regulator said the German lender would from now dismiss and ban employees who engaged in misconduct and install an independent monitor.

Deutsche Bank's settlement dwarfs the previous $1.5bn (€1.30bn) record demanded in 2012 from UBS of Switzerland.

Irish Independent

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