German Libor probe of Deutsche Bank to end in first-quarter: sources

Thu Jan 10, 2013 8:12am EST
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FRANKFURT (Reuters) - German regulator BaFin's probe of Deutsche Bank (DBKGn.DE: Quote) over possible manipulation of interbank lending rates will be completed by end-March, two people familiar with the matter told Reuters.

BaFin is conducting a so-called special probe - the most severe form of investigation it can undertake - into Deutsche Bank as part of a broader global investigation of interbank lending rates.

Regulators in Europe, Japan and the United States have been examining more than a dozen big banks over suspected rigging of the London interbank offered rate (Libor).

Deutsche Bank, which declined to comment, has said previously it has been cooperating with the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the European Commission on Libor.

These inquiries relate to periods from 2005-11.

An internal probe at Deutsche Bank found two former traders may have been involved in colluding to manipulate benchmark interest rates, sources told Reuters in July, adding there was no indication of failure at the top of the bank.

Libor rates, compiled from estimates submitted by large banks, are used to determine interest rates on trillions of dollars worth of contracts around the world.

British lender Barclays (BARC.L: Quote) agreed to pay a fine of more than $450 million, and Swiss bank UBS UBSN.VX agreed to pay $1.5 billion to regulators over its submissions of interbank rates.

As the credit crisis intensified from 2006-08, allegations started mounting that Libor no longer reflected the cost banks were paying for funds. Authorities have been examining whether traders tried to influence the rate to profit on bets on the direction it would go.   Continued...

A visitor walks past the bank's logo prior to Deutsche Bank's annual news conference in Frankfurt February 2, 2012. REUTERS/Kai Pfaffenbach