Sunday

23rd Feb 2020

Deutsche Bank among seven banks investigated for UK rate fixing

  • Deutsche Bank skyscraper in Frankfurt: The German giant was involved in British rate fixing? (Photo: orkomedix)

US prosecutors are investigating seven banking giants, including Germany's Deutsche Bank, for involvement in alleged fixing of the British interbank rate (Libor).

Apart from Germany's largest commercial bank, the US probe targets two American giants, JP Morgan Chase and Citigroup, Switzerland's UBS and three British banks - Barclays, Royal Bank of Scotland and HSBC, sources familiar with the investigation told Reuters and Bloomberg news wires.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

The subpoenas demand emails and documents exchanged between bank CEOs potentially exposing their role in the interbank rate fixing.

Over a dozen banks are suspected to have manipulated the interbank rate between 2005-2009, which is agreed daily in London among top bank managers based on how much they think they would lend to each other. Libor has an impact on hundreds of trillions of euros worth of transactions, mortgages, loans and credit cards.

Similar investigations are carried out in Britain and Germany, but there Deutsche Bank has obtained protection from prosecution in exchange for information on the case, according to Handelsblatt.

If prosecuted, the German bank could face hundreds of millions of euro in fines. This happened to Barclays, whose top manager Bob Diamond resigned in June after the bank admitted foul play and was fined €360 millions for involvement in the Libor rate fixing.

So far, the German bank is defending its top management, which changed earlier this year. In charge of the bank at the time of the Libor case was Josef Ackermann, a Swiss banker who also negotiated the terms of the second Greek bailout, which included losses for private banks.

Ackermann is the one who transformed Deutsche Bank into an international, investment-oriented bank, including risky investments on the US subprime mortgage market which led to the financial crisis in 2008. Celebrated in June at a gathering of top bankers for his high-level contacts to politicians and EU policy-makers, Ackermann was at the centre of a party held in Hamlet's castle in Denmark, complete with a rented opera singer and painter who drew his portrait.

Settlement in Iran case

Meanwhile another British bank admitting foul play, Standard Chartered, settled with US regulators on €277 million as fine for having carried out secret transactions with Iran, despite a trade embargo with the Middle Eastern state.

Prosecutors had charged the bank of designing "an elaborate scheme" between 2001 and 2011 which allowed its US-based branch to carry out dealings with Iran, leaving the US financial system "vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes."

HSBC, Europe's largest commercial bank, has also been accused by the US Senate of similar dealings with Iran.

Investigation

Big banks: From Greek bailout to Hamlet's castle

A lobby for the world's biggest banks - the International Institute of Finance - became a key EU player when it negotiated the debt cut on Greece's second bailout. Its world of rented castles and sopranos shows losses were bearable.

News in Brief

  1. Bulgarian PM investigated over 'money laundering'
  2. Greenpeace breaks into French nuclear plant
  3. Germany increases police presence after shootings
  4. NGO: US and EU 'watering-down' tax reform prior to G20
  5. Iran: parliamentary elections, conservatives likely to win
  6. Belgian CEOs raise alarm on political crisis
  7. Germans voice anger on rise of far-right terrorism
  8. EU leaders' budget summit drags on overnight

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. No breakthrough at EU budget summit
  2. EU leaders struggling to break budget deadlock
  3. German ex-commissioner Oettinger lands Orban job
  4. How big is Germany's far-right problem?
  5. Plastic and carbon proposals to help plug Brexit budget gap
  6. Sassoli repeats EU budget rejection warning
  7. Why Miroslav Lajčák is the wrong choice for EU envoy
  8. Unhappy EU leaders begin budget haggle

Join EUobserver

Support quality EU news

Join us