Deutsche Bank fined $2.5 bn for fixing interest rates

German banking giant Deutsche Bank will pay USD 2.5 billion in fines after admitting its guilt in a multi-bank conspiracy to rig LIBOR interest rates, US and British authorities said today.
"Deutsche Bank secretly conspired with its competitors to rig the benchmark interest rates at the heart of the global financial system," said US Assistant Attorney General Bill Baer of the Justice Department's antitrust division.
"Deutsche Bank's misconduct not only harmed its unsuspecting counterparties, it undermined the integrity and the competitiveness of financial markets everywhere."
Germany's biggest bank agreed to pay the record fine for rigging the London InterBank Offered Rate, used to peg millions of interest rate-sensitive contracts and loans around the world, from at least 2003-2011 to boost trading positions, officials said.

To avoid prosecution, Deutsche Bank agreed to plead guilty to a US criminal charge of wire fraud and pay a USD 775 million penalty to the Justice Department.
In addition, Deutsche Bank will pay USD 800 million to the US Commodity Futures Trading Commission, USD 600 million to the New York Department of Financial Services and USD 344 million to Britain's Financial Conduct Authority.

The bank admitted participating in price-fixing conspiracy with other banks and will continue to cooperate in the Justice Department's long-running investigation of the rate-rigging scheme, US officials said.
The deal allows Deutsche Bank to keep its operating license in the United States. The bank's New York branch has more than 1,700 employees and total assets exceeding USD 152 billion.

Deutsche Bank said it would book an additional charge of USD 1.6 billion in the first quarter for litigation costs related to the LIBOR case and other issues. Co-chief executives Jurgen Fitschen and Anshu Jain expressed regret for the rigging.
"We have disciplined or dismissed individuals involved in the trader misconduct; have substantially strengthened our control teams, procedures and record-keeping; and are conducting a thorough review of the bank's actions in addressing this matter," they said in a statement.
Deutsche Bank also agreed to get rid of traders operating in New York, London, Tokyo and Frankfurt.
"Certain employees involved in the wrongful conduct remain employed at the bank," said Benjamin Lawksy, superintendent of the New York State Department of Financial Services.