Deutsche Bank has paid a record $2.5bn to authorities in the US and UK to settle allegations that it manipulated the Libor benchmark rate, a key interbank borrowing rate.
In addition to forking out the largest total fine to date in the worldwide investigation into the Libor scandal, Germany’s biggest bank was ordered to dismiss seven employees, while a London subsidiary, DB Group Services, is pleading guilty to US criminal wire fraud charges.
The fines come at a critical juncture for Deutsche as it prepares to present a key strategic plan to its supervisory board on Friday designed to cement its position as Europe’s leading investment bank.
Deutsche has paid out £227m to the UK’s Financial Conduct Authority, $775m to the US Department of Justice, $800m to the Commodity Futures Trading Commission and $600m to the New York Department of Financial Services. It is the first time that the DFS, led by the combative Benjamin Lawsky, has been involved in a Libor settlement.
Deutsche — the seventh financial institution to be fined by the US and the UK in their seven-year investigation — admitted in Thursday’s settlement that its employees had rigged yen Libor and the Brussels and Tokyo equivalents, Euribor and Tibor, to benefit their trading book and those of traders at other banks.
Deutsche drew particular criticism and was handed the second-largest fine in the FCA’s history for misleading the British watchdog during the investigation.
“Deutsche Bank’s failings were compounded by them repeatedly misleading us. The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems and controls,” said Georgina Philippou, acting director of enforcement.
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