BERLIN: Deutsche Bank (DBKGn.DE) agreed with U.S. and British authorities to pay a record $2.5 billion (1.66 billion pounds) to resolve investigations it manipulated benchmark interest rates used to price loans and contracts around the world.
As part of the deal, Deutsche Bank’s London-based subsidiary pleaded guilty to criminal wire fraud and the parent group entered into a deferred prosecution agreement to suspend criminal charges.
Authorities also ordered Germany’s largest lender to fire seven employees and accused the bank of obstructing regulators.
The penalty is the biggest in a seven-year rate-rigging investigation by regulators who have accused some of the world’s largest financial institutions of tainting markets with fraud and collusion. It takes the total fines imposed to around $8.5 billion. Twenty-one people also have faced criminal charges.
Other banks and individuals are still under investigation for potential manipulation of the London Interbank Offered Rate, known as Libor, said Leslie Caldwell, Assistant Attorney General at the U.S. Justice Department. Britain’s Financial Conduct Authority also said on Thursday its investigation was on-going.
Our Libor investigation is far from over,” Caldwell said in a conference call after the Deutsche agreement was announced.
U.S. authorities fined Deutsche Bank $2.12 billion and UK watchdogs imposed a $340 million penalty for its role in a scam that ran from around 2003 to 2011 to fix rates such as the Libor to benefit their trading positions. The benchmark rates are used to price hundreds of trillions of dollars of financial transactions by banks and companies worldwide.
