The Biggest Fine of Them All

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Deutsche Bank facing a hefty fine.
  • Why it matters

    Why it matters

    Deutsche Bank’s profitability has been hard-hit by a series of lawsuits that have forced it to set aside billions of euros.

  • Facts


    • Deutsche Bank could settle by the end of the month with U.S. authorities over its role in Libor, according to news agencies.
    • Germany’s largest bank has set aside more than €3 billion for pending litigation. The Libor fine would eat up about half that amount.
    • Deutsche Bank has already paid €725 million to Brussels authorities for its role in Libor.
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It would match the biggest fine that a bank has faced in the global scandal over the manipulation of interest rates. And yet, if the settlement is confirmed, Deutsche Bank may actually be relieved its ordeal is finally over.

Germany’s largest bank is expected to settle for $1.5 billion, or €1.4 billion, with U.S. and British authorities for its role in helping manipulate a benchmark interest rate known as Libor, the London Interbank Offered Rate, in the run-up to the global financial crisis of 2008, according to information obtained by Handelsblatt.

The settlement could be finalized by the end of this month. The bank’s British subsidiary is also expected to admit guilt for its role – one of the largest banking groups to do so. News agencies Bloomberg and Reuters originally reported the settlement.

Deutsche Bank itself would not comment publicly on the matter. A spokesman said only that “we continue to work with the authorities that are reviewing interbank offered rates matters.”

April is shaping up to be quite the busy month for Germany’s largest bank, which is also one of the world’s largest players in investment banking. The results of a massive strategic overhaul are set to be announced by the end of this month, while its co-chief executive Jürgen Fitschen is expected to appear before trial charged with misleading authorities in a separate case.

Whatever the final verdict on Libor, Deutsche Bank would be among the last to settle charges that its traders helped rig a global benchmark for interest rates, which has been relied on by markets around the world to get a sense every day of exactly how much banks are charging each other for loans.

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