The LIBOR manipulation case has dragged on for many years, and already has delivered a record penalty levied on UBS. Considerably, Switzerland’s largest bank for about $1.5 billion by US and UK regulators. To settle charges for its involvement in the manipulation of London Interbank Offered Rate (Libor), marking the highest penalty paid by a bank to date.
According to recent reports, Germany’s largest bank, Deutsche Bank is set to reach a settlement over its alleged involvement in the LIBOR case. The amount of which is expected to surpass the $1.5 billion paid by UBS. In addition to the fine, one of its British subsidiaries will plead guilty to the allegations. The case seems to be near a close, but demands from New York’s financial regulator—who hasn’t previously been involved in related settlements—are pushing the penalty to new heights, as stated by sources familiar with the matter as stated by WSJ.
In 2012/2013, the long arm of the law caught up with other global financial institutions, like Barclays PLC, UBS AG and Royal Bank of Scotland PLC. Resulting in an excess of $3.5billion settlement paid to the the US Commodity Futures Trading Commission, the Justice Department. as well as the UK Financial Conduct Authority.
The complications in Deutsche’s settlement case arise from the fact that New York’s Department of Financial Services headed by Benjamin Lawsky, is also demanding a large sum for the settlement of the case. Although the exact amount has not been disclosed and stayed unknown for the public. The regulator has a reputation of hitting offenders hard with huge penalties and threats of license revocations.
As Deutsche Bank to plead guilty over LIBOR manipulation case, the Bank said in a statement, “We continue to work with the authorities that are reviewing interbank offered rates matters.”
In addition to those inquiries from prosecutors and the New York regulator, Deutsche Bank’s American operations faced on the Federal Reserve in a direct response, first off with tax internal controls. Secondly, when a unit failed the Fed’s annual stress tests, due to “substantial weaknesses.” This particular unit was the only bank taking the Fed’s stress test for the first time this year, and Deutsche Bank indicated that it: “committed to strengthening and enhancing its capital planning process.”