Deutsche Bank has been fined £227m for Libor and Euribor-related misconduct by the Financial Conduct Authority (FCA).
The fine, which is the biggest ever handed down by UK financial regulators, is so large because Deutsche Bank had also “misled the regulator”, which could have hampered its investigation.
Between January 2005 and December 2010, the trading desks at Deutsche Bank manipulated their Libor and Euribor submissions across all major currencies.
This misconduct involved at least 29 Deutsche Bank individuals, including managers, traders and submitters, primarily based in London, but also in Frankfurt, Tokyo and New York.
In a statement, the FCA said: “Deutsche Bank’s misconduct in relation to Euribor exemplifies how serious its failings were, and the potential they had to have a significant impact on the markets.”
It said that traders at Deutsche Bank used a “three-pronged approach” to attempt to manipulate Euribor. These involved influencing Deutsche Bank’s submitters to alter the Bank’s Euribor submissions; colluding with other banks that submitted the rates on which Euribor is based and requesting that they alter their submissions; and occasionally offering or bidding cash in the market to create the impression of a change in the supply of funding in order to influence other panel banks to alter their submissions.
The FCA added: “This misconduct went unchecked because of Deutsche Bank’s inadequate systems and controls.”
Georgina Philippou, acting executive director of enforcement and market oversight, said: “This case stands out for the seriousness and duration of the breaches by Deutsche Bank – something reflected in the size of today’s fine. One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained.
“Deutsche Bank’s failings were compounded by them repeatedly misleading us. The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems and controls.
“This case shows how seriously we view a failure to cooperate with our investigations and our determination to take action against firms where we see wrongdoing.”