Benjamin M. Lawsky, the Superintendent of Financial Services announced today that Deutsche bank has indeed been fined a record levy amounting to $2.5billion in settlement of of its alleged involvement in a host of interest rate benchmark manipulation cases.
The fines are related to the banks participation in the: London Interbank Offered Bank (LIBOR), the Euro Interbank Offered Rate (EURIBOR) and Euroyen Tokyo Interbank Offered Rate (TIBOR).
Benjamin Lawsky said: “Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain. While a number of the employees involved in misconduct have already left the bank, those that remain are being terminated or banned from the New York banking system.”
“We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals,” he added.
The $2.5 billion will be payed to various regulators in the following ratio:
- $600 million to the New York State Department of Financial Services (NYDFS)
- $800 million to the U.S. Commodities Futures Trading Commission (CFTC)
- $775 million to the U.S. Department of Justice (DOJ)
- £227 million (approximately $340 million) to the United Kingdom’s Financial Conduct Authority (FCA)
This represents the FCA’s largest LIBOR and EURIBOR related fine. It was of this magnitude becuse the bank was percieved to have attempted misleading investigators which slowed down the process of findings. It also represents the largest single fiscal penalty issued by the CFTC since its inception.
In addition to Deutsche bank fined $2.5billion in manipulation case, the bank will also terminate individual employees who engaged in the misconduct, and install a monitor for violations of New York law.