Kirstin Ridley and Karen Freifeld London and New York
US AND British regulators have fined Deutsche Bank $2.5 billion (R30.3bn) while 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. Twenty-one traders and brokers face criminal charges.
US regulators fined Germany’s largest bank $2.175bn and British watchdogs imposed a £227 million (R4bn) penalty for its role in a scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin – together benchmarks for hundreds of trillions of dollars of financial products and loans worldwide.
Britain’s Financial Conduct Authority 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.
Deutsche
Bank’s settlement dwarfs the previous $1.5bn record demanded in 2012 from Switzerland’s UBS. Two former UBS traders have been criminally charged and its Japanese unit has pleaded guilty to US wire fraud charges.
Allegations that bank and brokerage staff attempted to rig the Libor, the rate at which banks can borrow from each other, first emerged during the credit crisis in 2008. – Reuters