The report is only 37 pages long – not even as thick as most newspapers. Yet the letter that Germany’s financial regulator BaFin sent to Deutsche Bank 10 weeks ago could prove to be a heavy burden for the troubled bank. It could even lead to more top managers being fired from their jobs.
Details of the letter have surfaced at a time when Germany’s largest bank was hoping for a fresh start following a series of legal scandals that had damaged both its reputation and bottom line. Deutsche Bank had already last month announced the departure of its two chief executives, Anshu Jain and Jürgen Fitschen, who had become too tainted in the eyes of many to lead a change in the bank’s culture.
The regulator’s report concerns Deutsche Bank’s role in the manipulation of the Libor rate, one of the most important global interest-rate benchmarks. The bank was fined a record $2.5 billion by U.S. and U.K. regulators in April to end a five-year probe into the manipulation of London-based Libor and Euribor, a Brussels-based benchmark.
But pressure is now mounting on Paul Achleitner, the non-executive chairman of the bank’s supervisory board which hires and fires executives, and John Cryan, the new co-chief executive who will become sole CEO after Mr. Fitschen steps down next May. Employees, major investors and politicians are calling for further staff changes in the wake of the report.
“The aim now should be to use the opportunity for a credible new start,” said fund manager Ingo Speich from Union Investment, a large shareholder. “The restructuring of the management board and in senior management has only just begun and is certain to continue.”
Another major investor, who declined to be named, said: “If the rest of the old guard would take Mr. Jain’s lead and leave, we would welcome it.”