LONDON (Reuters) - Representatives from Germany’s financial watchdog Bafin will visit the London offices of Deutsche Bank, the country’s biggest lender, as it steps up investigations into alleged currency market manipulation, a source familiar with the process said on Monday.
This follows Deutsche’s suspension last week of traders in New York and mirrors the arrival of U.S. regulators in London last week at Citigroup’s London headquarters, marking an escalation in the global probe.
German magazine Der Spiegel reported on Sunday that Bafin was setting up a so-called special investigation, putting the case at the top of its priority list.
Bafin was not available for immediate comment.
Deutsche Bank declined to comment, and referred Reuters to a previous statement that it is cooperating with those investigations, and will take disciplinary action with regards to individuals if merited.
The source could not say when the visit would take place, or whether Bafin officials also plan to visit Deutsche’s U.S. headquarters in New York.
Benchmark foreign exchange rates, or daily fixings, are a cornerstone of global financial markets, used to price trillions of dollars worth of investments and deals and relied upon by companies, investors and central banks.
London is the hub of the $5.3 trillion-a-day global foreign exchange trading market, accounting for around 40 percent of that total.
Authorities around the world are investigating whether senior traders at some of the world’s biggest banks colluded to rig these rates.
They include the U.S. Department of Justice, Britain’s Financial Conduct Authority and Switzerland’s main watchdog FINMA.
Deutsche Bank has been the biggest foreign exchange trader in the world for nine years running, seeing 15.18 percent of global daily turnover in 2013, according to Euromoney magazine.
The bank’s shares fell sharply on Monday following a surprise fourth-quarter loss due to a steep drop in debt trading revenues and heavy litigation and restructuring costs.
Reporting by Jamie McGeever; Editing by Carmel Crimmins and Jane Merriman