The reason for this are deficiencies in preventive measures that have since been remedied to prevent manipulation of the Euribor reference interest rate. The matter is quite unpleasant for the institute.
Headquarters of Deutsche Bank in Frankfurt am Main
The bank wants the fine accept the Bafin.
Frankfurt The Deutsche Bank has to pay a fine of 8.66 million euros for inadequate controls. The background to this are deficiencies in the controls used to determine the Euribor reference interest rate. The bank “temporarily did not have effective preventive systems, controls and strategies”, which it is obliged to under a European regulation to prevent manipulation of the Euribor, the Bafin announced on Wednesday.
Reference interest rates such as the Libor or the Euribor indicate the conditions under which banks lend money to each other. Financial transactions with a volume of many hundreds of trillion dollars daily are linked to these reference rates, which means that profits can be made even with small movements. The Euribor is calculated on the basis of reports from the banks participating in the so-called Euribor panel. Deutsche Bank is one of them.
The bank emphasized that the penalty imposed by the Bafin concerns the internal controls of the institute, but that there are no indications that these deficiencies would have led to an incorrect report in the calculation of the Euribor – and thus to a falsification of this reference interest rate. She wants to accept the fine.
Even if this did not lead to a manipulation of the Euribor, the lack of control when determining a reference interest rate is important for the Deutsche Bank extremely embarrassing: The institute was at the Manipulation of important reference interest rates, such as the Libor and the Euribor, revealed in 2011. For this it has already paid fines amounting to four billion dollars to authorities in the USA, Great Britain and the EU.
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Defects from April 2019 to April 2020
It was probably the most expensive and momentous scandal for the institute, as a result of which numerous top managers had to leave the institute. A former star dealer of the institute was sentenced to imprisonment in London in 2018.
The point in time at which the lack of control still existed is also unpleasant for Deutsche Bank: the relevant one EU regulation, which the bank violated, did not come into force until the beginning of 2018. The deficiencies now punished by the Bafin occurred between April 2019 and April 2020, people familiar with the matter told the Handelsblatt. The bank and the Bafin did not want to comment on this.
However, the bank emphasized that it had “coordinated and already implemented the first measures to improve its controls with the responsible supervisory authority”. For the institute, it continues to be “top priority to identify and remedy possible weaknesses in the control processes.” Thorsten Pötzsch led securities supervision of the Bafin set penalties of up to ten percent of the turnover. In the worst case, that would have meant a fine of around two billion euros for Deutsche Bank. Measured against this, the institute got off lightly with EUR 8.66 million.
In April, the Bafin complained about money laundering prevention
In the past, Deutsche Bank had to pay heavy fines for deficiencies in its control systems, for example in the area of money laundering prevention. In early 2017, for example, British and American supervisory authorities fined the institute $ 630 million because Russian customers had laundered billions of dollars through the bank.
It was not until April that the Bafin complained about it from their point of view, slow progress in improving the prevention of money laundering. She therefore added and extended the mandate of the money laundering special watchdog appointed by her in 2018 the money house . The bank exchanged its money laundering officer shortly afterwards .
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