German watchdog readies Deutsche Bank Libor report: source

Mon Aug 12, 2013 9:59am EDT
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FRANKFURT (Reuters) - German regulator BaFin has completed its report of Deutsche Bank's (DBKGn.DE: Quote) role in setting interbank lending rates and is set to submit a copy to the country's flagship lender this week, a source familiar with the matter said on Monday.

BaFin and other regulators are investigating more than a dozen banks and brokerages over allegations they manipulated benchmark interest rates such as Libor and Euribor, which are used to underpin trillions of dollars of financial products from derivatives to mortgages and credit card loans.

The bank watchdog is continuing aspects of its probe, but has found no evidence of wrongdoing on the part of members of the management board, the source added. BaFin has the power to force management board members to resign.

Nonetheless, further in-depth probes could still follow, the source said, "In some cases we have to dig deeper and ask, were some people really innocent?"

BaFin declined to comment.

Deutsche Bank on Monday said: "The Bank is cooperating in the various regulatory investigations and conducting its own ongoing review into the interbank offered rates matters."

The lender said that no current or former member of the management board had any inappropriate involvement in the interbank offered rates matters.

It added, however, that certain employees had taken action on their own initiative that fell short of the bank's standards. Deutsche has already dismissed or suspended seven employees involved in setting benchmark rates.

Reuters reported in April that BaFin would intensify its probe of the bank's role in setting interbank lending rates, citing two sources familiar with BaFin's report.   Continued...

The headquarters of Germany's largest business bank, Deutsche Bank are seen behind a red traffic light in Frankfurt January 30, 2013. REUTERS/Kai Pfaffenbach