German banking group Deutsche Bank has been fined $2.5 billion (£1.66 billion) by US and UK regulators ($2.1 billion and £227 million respectively) for trying to manipulate interest rates.
"This case stands out for the seriousness and duration of the breaches by Deutsche Bank – something reflected in the size of today’s fine. One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained," Georgina Philippou, acting director of enforcement and market oversight at the Financial Conduct Authority (FCA) said in a statement.
"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.This case shows how seriously we view a failure to cooperate with our investigations and our determination to take action against firms where we see wrongdoing," she added.
Between January 2005 and December 2010, trading desks at Deutsche Bank manipulated its IBOR submissions across all major currencies.
Deutsche Bank tightens governance controls
LIBOR and EURIBOR are based on daily estimates of the rates at which banks on a panel can borrow funds in the inter-bank market.
This misconduct involved at least 29 Deutsche Bank individuals including managers, traders and submitters, primarily based in London but also in Frankfurt, Tokyo and New York.
The FCA said that traders at Deutsche Bank attempted to maximise the impact on EURIBOR, such as influencing Deutsche Bank’s submitters to alter the Bank’s EURIBOR submissions, and colluding with other banks that sat on the panel that submitted the rates on which EURIBOR is based and request that they alter their submissions.
Deutsche Bank said in a statement that it had "disciplined or dismissed individuals" involved and tightened governance controls. However, US regulators have demanded the dismissal of a further seven senior individuals still employed.
Shares in the German Bank were down 0.47 per cent to $33.79 at 09:31 this morning (April 23rd) in New York.
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