German Regulators To Question Deutsche Over LIBOR Scandal

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German financial regulators are not satisfied with the internal investigation conducted by Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) in the case of the global interest rigging scandal. The regulators have decided to sit their own probe in the bank according to the sources that are in knowledge of the matter, reports Chicagotribune.

German Regulators To Question Deutsche Over LIBOR Scandal

Bafin, who is the German regulator, is not authorized to impose fines, but the findings of the regulator will be important for the settlement talks between Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) and regulators in the United States and Britain. The regulator has examined the internal outcomes of Deutsche Bank under its independent probe, and has also sent a progress report to Germany’s finance ministry according to the sources.

The report, which Bafin has sent to the ministry, claims that as the regulator is not satisfied with the findings of the bank, it needs to set up its own investigations into Germany’s largest lender. The internal ongoing probe in the bank is conducted under the legal department along with the support of external counsel.

Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB), Bafin and the Bundesbank, in charge of banking supervision, did not comment over the news. Bafin has not been given any date on which it has to submit its report. According to a source familiar with the matter, Deutsche Bank has made provisions in advance for the possible fines in the LIBOR  case.

According to the sources, if any of the top managers are found to be involved in the rigging scandal, it may result in severe punishment.

Until now, Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) has sacked or dismissed seven employees whom it found guilty of rigging the benchmark rate. The German regulator Bafin is taking assistance from Bundesbank and accountant Ernst & Young in its investigation. The regulator is investigating into the facts like how long the banks took to react once the problem was unearthed.

There has been continued investigation into the matter of LIBOR scandal by regulators all around the Globe. There are dozens of Banks along with the brokerages who are under the investigation from these regulators regarding the accusation that they are facing in connection of manipulation of benchmark interest rates like LIBOR and Euribor. These interest rates are used as standard rates to decide the course of trillions of dollars of financial products from derivatives and mortgages, and credit card loans.

According to the analysts, the exposure amount can be less than 500 million euros ($654 million). UBS AG (NYSE:UBS), a Swiss bank, settled for $1.5 billion in December as a fine against the rigging of benchmark interest rate. In February this year, Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) was fined $615 million for rate rigging.

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