Lawmakers seek Libor controls at Deutsche Bank hearing
By Edward Taylor and Matthias Sobolewski
BERLIN (Reuters) - German politicians called for tighter regulation of global interest rates after questioning Deutsche Bank (DBKGn.DE: Quote) about the manipulation of London's Libor benchmark lending rate.
The flagship lender said it had made some provisions to cover the costs of various probes of possible manipulation of benchmark interest rates and reiterated that there were no signs that senior management had behaved inappropriately.
But politicians in Berlin were unimpressed.
Representatives from the Greens, SPD and the conservative Christian Democrats (CDU) were left dissatisfied with "meager" responses to their questions and called for stronger regulation of the London interbank offered rate (Libor) in the wake of manipulation that came to light earlier this year.
"There has to be much stronger controls. Here we have another example where the freedom of the markets was abused," said Klaus-Peter Flosbach of the CDU.
Libor, used to price billions of dollars' worth of financial contracts, was thrown into the spotlight in June when the UK and United States fined British bank Barclays (BARC.L: Quote) a record $450 million for fixing rates during the credit crunch.
Deutsche Bank is talking to authorities in the United States and Europe investigating the setting of rates between 2005 and 2011.
Deutsche Bank board member Stephan Leithner, in charge of regulation, was quizzed by the German Bundestag lower house's Finance Committee on Wednesday after the bank decided not to send Co-Chief Executive Anshu Jain. Continued...