It seems like I was right in suspecting that it was Deutsche Bank that cracked under the investigative pressure.
Regulators are focusing on at least four of Europe’s biggest banks as they investigate the attempted manipulation of the region’s benchmark interest rate, suspecting that Barclays’ traders were the ringleaders of a circle that included Crédit Agricole SA (EPA:ACA), HSBC Holdings plc (LON:HSBA) (NYSE:HBC), Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) and Société Générale SA (EPA:GLE) (PINK:SCGLY).
Evidence of links between traders at all four banks and Barclays’ PLC (LON:BARC) (NYSE:BCS) former euroswaps trader Philippe Moryoussef is under scrutiny, people involved in the process have told the Financial Times.
According to an FT investigation, Mr Moryoussef is alleged to have contacted a number of traders whom he knew at other banks, either through previous employment or via professional or personal networks. Regulators are looking at suspected communication with Michael Zrihen at Crédit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, all of whom no longer work at the groups in question, according to people familiar with the investigations.
There had been a broad assumption that most banks under investigation were suspected of manipulating Libor submissions in the financial crisis period running from 2007-9 to appear healthier than they really were, sometimes allegedly with the implicit nod from policy makers.
But that is far from conclusive that Deutsche Bank got weak knees, but
The Deutsche Bank dealer only left the bank in 2012 according to a trade journal.
Besides Barclays: Deutsche Bank, Crédit Agricole, HSBC and Société Générale are in the ring.
Comment: Apparently the Société Générale suspect is still being truncheoned in the basement?
Where I smelled a rat was the information that Deutsche Bank wanted leniency for cooperating with the authorities.
Conclusive: No, but a wild guess suddenly turned into a good guess.
But there are repercussions on the way:
The banks have manipulated the LIBOR – big time. Canadian CB CEO Mark Carney suggests:
”If the interest rate should have structural flaws that cannot be fixed – which is possible – then there are several options.”
One option would be to scrap the LIBOR.
Mark Carney became chairman of the international Financial Stability Board (FSB) November 1st 2011, when Draghi became chairman of the ECB.
Charney’s spokesperson said that the CB CEO’s meet September 9th in Basel, Switzerland for talks on reforms.
Comment: Why does that date stand out? If I recall correctly that is response date to the British White Paper: Banking Reform. This might be a coincidence, but to me it seems that the CEO of Bank of England already has his mind made pretty much up on what he is to tell his colleagues.
Secondly: Draghi seems to have left his successor with a potato of uncomfortable temperature.
The confidence in the European bank interest rates have been severly compromised and the brings the Dane Christian Clausen CEO of the Swedish Bank Nordea forward in his capacity as chairman of the European Banks Association.
Christian Clausen is after the LIBOR scandal ready to reform the fixing of the bank interest rates – which will also affect the Danish
CIBOR (Copenhagen Inter Bank Offered Rate).