Saturday

18th Aug 2018

Deutsche Bank convicted in Italy in widening scandal

  • Deutsche Bank's headquarters in Frankfurt were raided by police last week (Photo: orkomedix)

An Italian judge has convicted Deutsche Bank of fraud, as the bank struggles to save its reputation amid widening probes over tax evasion and rate-fixing after the departure of its former CEO Josef Ackermann.

Deutsche Bank was convicted together with US giant JP Morgan Chase, Switzerland's UBS and a German-Irish bank, Depfa, for their role in overseeing fraud by their bankers in the sale of interest rate bets to the city of Milan. About €90 million are to be seized from the four banks, who will also have to pay €1 million each in fines.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The case is only the first in a series of similar complaints: around 600 Italian municipalities had bought such derivatives and lost about €4 billion during the financial crisis, according to the Italian central bank.

In parallel, Deutsche Bank is part of a worldwide investigation for altering the British benchmark interest rate (Libor) and its euro-counterpart (Euribor). Once the European Central Bank takes over the supervision of eurozone's largest banks, Deutsche Bank will fall under the new scrutiny.

The Milan sentence, which can still be appealed, also comes after Deutsche Bank had its Frankfurt headquarters raided last week in a probe for alleged tax evasion on profits cashed in from trading with carbon permits.

Germany's largest commercial bank, once renowned for its solid and risk-averse business, has been transformed over the last decade into an aggressive investor and speculator with risky bets known as derivatives, largely due to the leadership of Swiss top banker Josef Ackermann, who stepped down earlier this year.

The US Senate named the German bank alongside Goldman Sachs as the two institutions that played a “key role” in the financial crisis.

But unlike Denmark's Danske Bank whose management apologised for its role in the financial crisis, Ackermann still got praise for it.

At his opulent farewell party, Ackermann received video-testimonials including from EU commissioner Olli Rehn, who praised him for "restoring confidence in the financial sector."

Ackermann's successor, Juergen Fitschen, who vowed to change the company's culture, has meanwhile also come under fire in Germany for having phoned up the regional governor to complain about the police raids which are denting his bank's reputation.

Scandals drain Deutsche Bank's coffers

Germany's largest bank posted €2.2 billion losses in the last three months, largely due to a series of investigations into alleged fraud, tax evasion and rate-rigging. Its new management promises a "change of culture."

Fresh corruption scandal engulfs Deutsche Bank

After being fined for rate-fixing and convicted for deceiving customers, Deutsche Bank finds itself embroiled in a new scandal: hiring the offspring of Chinese politicians in return for contracts.

EU gets record response on 'summertime' consultation

The EU Commission has received several million responses from citizens, businesses, and organisations on whether to end the daylight summertime savings. Any tangible change would take ... time.

Exclusive

Women shun EU-funded site for female entrepreneurs

Wegate.eu, which received €1.2m in EU money since its launch almost two years ago, has less than a thousand registered users - from a possible target audience of at least 10 million.

News in Brief

  1. Germany and Greece strike deal on taking back migrants
  2. Merkel confronts far-right critics: '2015 will not be repeated'
  3. UN: Predictable disembarkation process urgently needed
  4. Slovenia set to select former comedian as prime minister
  5. Polish president to veto election rule helping big parties
  6. MEPs blast UK 'alphabetical approach' on citizens rights
  7. EU hits back over Salvini's blame for bridge collapse
  8. Poll: Sweden's social democrat-led government set to win again

Opinion

Has the time finally come for 'European champions'?

Since Emmanuel Macron took the French presidency in 2017, the concept of consolidating European industries to create continental 'champions', capable of competing on a global scale, has been revived.

EU 'tax lady' hits Google with record fine

Margrethe Vestager has fined the US tech giant with €4.34bn for abusing its market dominance in mobile operating systems - but assured US president Donald Trump that it is not because she does not like America.

Stakeholders' Highlights

  1. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  2. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  3. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  4. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  5. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  6. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  7. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  8. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  9. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  10. Mission of China to the EUChina: Work Together for a Better Globalisation
  11. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  12. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma

Latest News

  1. EU gets record response on 'summertime' consultation
  2. 'Nativism' and the upcoming Swedish and Bavarian elections
  3. Former Malta opposition leader fears for his life
  4. Women shun EU-funded site for female entrepreneurs
  5. Building a Europe more resilient to terrorism
  6. Brexit talks resume as chance of 'no deal' put at 50:50
  7. US trial sheds light on murky Cyprus-Russia links
  8. Burned cars fuel Swedish election debate

Join EUobserver

Support quality EU news

Join us