Deutsche Bank Cracks the Libor Scandal Pandora’s Box

By Tom
Updated on


If I don’t misread El País completely: 

The banking secrecy is broken in Spain:


In the official state statement last Saturday established that the information the Spanish CB:

”has to deliver to the European Commission, the ECB, the European Bank Inspection, the IMF, the EFSF and the EMS” would be “exempted from the secrecy obligation”

“this information is necessary for the effectiveness” of the instructions with the financial assistance.

With all reservations for my inept translation the gist of it seems to be:

Every Tom, Dick and Harry in the several EU authorities will have access to all information on an client and account basis.

There might be a reason for Neue Zürcher Zeitung in Switzerland

Talking furiously about “receiving stolen goods” and has with outrage contacted the German Finance Ministry:


The spokesperson for Mr. Schäuble pointed out, that the wording “active procurement of tax information”– which is used in the bilateral agreement – leaves certain discretion to the German States in the interpretation. The basic principle of “public investigation” obliges authorities to investigate all evidence of criminal acts. That includes offered data.

The tax inspectors of the regional governments could then take the stand that they did not actively canvas for the purchase of banking data. If, however, they were offered a CD they would be obliged to investigate – all leads.

The Alpine region offers lots of positions between rocks and hard places – and avalanches.

Seem like the Swiss banks are in a predicament…..

The New York Times has:


”LONDON — Robert E. Diamond Jr., the former chief executive of Barclays, told a British parliamentary committee on Wednesday that the manipulation of global interest rate benchmarks involving 14 traders at the bank had made him “physically sick.””

[So it wasn’t spending more time with his family – it was health reasons! (Happy to correct this misunderstanding on my part).]


“A number of banks were posting rates that were significantly below ours that we didn’t think were correct,” Mr. Diamond told the committee.

“I can’t sit here and say no one in the industry didn’t know about the problems with Libor,” he said. “There was an issue out there and it should have been dealt with more broadly.”

Mr. Diamond also sought to deflect attention from the bank’s role in the authorities’ continuing investigation, pointing out that other major global financial institutions also had been implicated.

[It is generally a good idea when”singing” your head off to remain in tune.]


United States and British regulators, who announced a $450 million settlement with Barclays PLC (LON:BARC) (NYSE:BCS) last week, are currently investigating the actions of more than 10 large financial institutions, including JPMorgan Chase & Co. (NYSE:JPM), UBS AG (NYSE:UBS) and Citigroup Inc. (NYSE:C).


There is a side issue here: The British bank inspection – Financial Services Authority – is being disbanded and their activities put under the Bank of England (British CB).

This reminds me of the Irish drunk asking at pub brawl:”Is this a private fight – or can anybody join in?”

Everything in European (International?) banking seems to come apart in all possible places. Apparently we have passed the point where things can be kept under the lid: Too many are fighting dirty to keep themselves out of prison.

Handelsblatt has: 

Deutsche Bank flips and turns state evidence:


Deutsche Bank has in the affair concerning major banks manipulation of interest rates turned state evidence before the EU and in Switzerland, according to ”insiders”. Germanys largest financial enterprise

becomes leniency in the an already made agreement – in case of a possible conviction. This according to two persons in the ”sphere” of the bank (Reuters Sunday).

Deutsche Bank AG (NYSE:DB) has not pleaded guilty in the LIBOR manipulation.


That opens up new speculations. Apparently Deutsche Bank AG (NYSE:DB) was the one that cracked in the conspiracy!

That would make an awful lot of sense – both as to origin and timing. I don’t know exactly how badly Deutsche Bank was hit by the Greek bankruptcy. As a central player in the various –IOR’s they would be in a position to furnish a lot of sleazy detail. This leads to the next question: In return for what?

Presumably Deutsche Bank would benefit from any embarrassment to Barclays PLC (NYSE:BCS) (LON:BARC) – and the others, but what set of the apparent eloquence? I mean trespassing on Swiss banking laws? I didn’t know that was possible for a bank! And then Deutsche Bank pleas not-guilty in the LIBOR case. What has that got to do with Switzerland (a non-EU member)?

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