Deutsche Bank, Germany's largest bank, has been fined $2.5 billion dollars by U.S. and U.K. regulators for trying to manipulate the so-called Libor rate, a benchmark for inter-bank loans which in turn is used to set interest rates on everything from credit card debt to mortgages.
The German bank is one of eight financial institutions, including Swiss-based UBS and the Royal Bank of Scotland, that were caught up in the scandal, which involved dozens of traders and managers and spanned a four-year period from 2005-2009.
As the BBC writes: "traders colluded to set these benchmark rates, hoping to improve their trading positions. The regulators released email exchanges between traders and submitters - the people who provide the information on which rate Libor and Euribor is set each day."
At least 29 Deutsche Bank employees were involved in manipulating the Libor, which stands for London Inter-Bank Offer Rate.
The Guardian notes that Deutsche Bank's management, led by Anshu Jain and Jurgen Fitschen "will be hoping the avoid the fate of Bob Diamond, who was forced out of Barclays in July 2012 following its Libor rigging fine. When Royal Bank of Scotland was fined in February 2013, John Hourican, the head of the investment bank, left "in recognition of the management issues" and the impact on the bank's reputation. Piet Moerland, chairman of Rabobank, quit when the Dutch bank was fined 660m in October 2013."
The Guardian adds: "Lloyds Banking Group has also been fined for rigging Libor, along with brokers Icap and RP Martin."
LIBOR
Germany