US: Deutsche Bank fined $220m in LIBOR rigging probe
26 Oct 2017

Deutsche Bank has agreed to pay $220 million for fraudulently manipulating the US dollar LIBOR ( London Interbank Offered Rate) and other benchmark interest rates.

US government units and not-for-profit organisations in New York and throughout the US were cheated of millions of dollars when they entered into financial contracts with Deutsche Bank without knowing that it and other banks on the USD-LIBOR-setting panel were manipulating LIBOR, according to a statement from the office of Attorney General Eric T. Schneiderman.

From 2005 to 2010, a panel of 16 banks made USD LIBOR submissions that were supposed to reflect borrowing rates in the interbank market, however investigators say Deutsche Bank acted unlawfully by making false or misleading LIBOR submissions.

Deutsche bank was also aware that other banks were manipulating their LIBOR submissions and that LIBOR was a false rate.

“As a result of this misconduct, Deutsche Bank employees and management knew or had strong reason to believe that Deutsche Bank’s and other panel banks’ LIBOR submissions did not reflect their true borrowing rates and that published LIBOR rates did not reflect the actual borrowing costs of Deutsche Bank and other panel banks,” the statement explained.

“We will not tolerate fraudulent, manipulative or collusive conduct that interferes with or undermines confidence in our financial markets. Large financial institutions, like all other market participants, have to abide by the rules,” said Attorney General Schneiderman.

“As a result of Deutsche Bank’s misconduct, government entities and not-for-profits were defrauded of funds that otherwise could have been used to benefit New Yorkers.”

A Deutsche Bank spokesman said in an emailed statement: “This settlement resolves the bank’s final pending U.S. regulatory inquiry related to Libor.”

Benchmark interest rates affect financial instruments worth trillions of dollars, and have a widespread impact on global markets and consumers because LIBOR may determine how much they will be paid on their investments.

Deutsche’s fine is the second in the probe after Barclays paid a $100 million settlement in August 2016.

Separately, in June this year the UK’s Serious Fraud Office charged Barclays and four of the bank’s top executives with offences including conspiracy to commit fraud.

KYC360 News

Related topics:

UK Bank of England implicatd in LIBOR rigging – what you need to know

Ex-Deutsche Bank trader pleaded guilty in the US to LIBOR scheme

US fines HSBC $175m over unsafe foreign exchange trading

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