The bank has reached a joint settlement with the Department of Justice, Commodity Futures Trading Commission, and New York State Department of Financial Services in the US and the Financial Conduct Authority (FCA) in the UK over all remaining investigations into past submissions for interbank offered rates (IBOR).
The FCA claims that between January 2005 and December 2010 trading desks at the bank manipulated its submissions across all major currencies.
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.
Manipulation
In the UK, the FCA said around 29 members of staff including managers, traders and submitters across London, Frankfurt, Tokyo, and New York manipulated the EURIBOR in the following three ways:
- To influence Deutsche Bank’s submitters to alter its EURIBOR submissions;
- To collude with other banks that sat on the panel that submitted the rates on which EURIBOR is based and request that they alter their submissions; and
- On occasion to offer or bid cash in the market to create the impression of a change in the supply of funding in order to influence other panel banks to alter their submissions.
The regulator said the misconduct went unchecked because of the bank’s inadequate systems and controls, adding that it gave misleading information about its ability to provide a report commissioned by the German regulator, BaFin.
It is also alleged to have provided the FCA with a false attestation that stated its systems and controls in relation to LIBOR were adequate, despite having none.
As a result of its early settlement with the UK regulator, the bank qualified for a 30% discount on its fine.
