Deutsche Bank will change but not because of the record fine delivered in the wake of the IBOR scandal.
May 06, 2015 | Carol WheatcroftDeutsche Bank will pay a record $2.5 billion penalty for its role in the rigging of London, Euro and Euroyen Tokyo interbank offered rates (IBORs). This will undoubtedly tarnish the bank’s reputation as has been the case with other banks caught up in the scandal; trust has been broken. The bank has sought to limit the fallout by announcing a series of measures to demonstrate how seriously it is taking the matter; traders have been dismissed or disciplined and a range of new internal controls and reviews have been implemented. These include strengthening control teams, procedures and book-keeping, and upgrading the bank’s systems to enable it to more quickly identify electronic and voice communications that are of interest to regulators.
Without doubt the IBOR scandal is truly shocking especially when it was discovered to be so widespread and the act of rigging rates treated with such insouciance by the traders involved. Since the scandal first came to light in 2012 many of the banks involved have paid heavy fines to US and UK regulators, tightened up internal oversight– at one point there was a race to own up in order to reduce fines - and regulators around the world have woken up and introduced new oversight procedures.
Deutsche Bank’s involvement in the scandal has yet to be fully resolved as an announcement about its settlement with BAFIN, the German regulator is still awaited. However the bank has booked an additional provision of EUR1.5 billion for IBOR and other matters in its first quarter 2015 financial results.
The bank appears to have shown a remarkable level of disrespect towards regulations and some regulators. BAFIN did not share its preliminary findings with UK and US regulators leaving it to Deutsche Bank to make the disclosure. Deutsche Bank failed to oblige and further obstructed the UK regulator by failing to provide timely, accurate and complete information including making f...
Categories:
Operational Risk, Regulation, Risk and Regulation, Aid Disbursement , Performance MeasurementKeywords:Deutsche Bank, IBOR, BAFIN, ECB
