US regulators target Deutsche Bank over Libor | Business| Economy and finance news from a German perspective | DW | 23.03.2015
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US regulators target Deutsche Bank over Libor

According to media reports, the New York-based Department of Financial Services has started investigating Deutsche Bank over alleged Libor manipulation. The lender is already under fire from the Justice Department.

The "Financial Times" reported Monday the Department of Financial Services (DFS) had begun a probe into what role Germany's biggest lender, Deutsche Bank, played in an international scandal caused bay the manipulation of the crucial Libor benchmark borrowing rate.

Deutsche is already trying to reach a deal in a Libor investigation by the US Justice Department, being one of only few European banks, which have not yet struck a deal with US regulators.

"We continue to work with the authorities that are reviewing inter-bank offered rates matters," Deutsche was quoted as saying.

Deutsche not picked by chance

Until now, DFS regulators had stayed out of the Libor probes that have so far resulted in settlements totaling over $2 billion (1.85 billion euros) with lenders including Barclays, UBS and Royal Bank of Scotland.

The first Libor investigation by the DFS targets a lender with one of the biggest presences in the US, with Deutsche boasting a sizeable investment banking unit and large-scale trading operations.

The "Financial Times" said the current probe would not make life easier for the German bank in the US which also had "a frosty relationship with the Federal Reserve." The latter, it recalled, had faulted Deutsche's risk controls in a recent capital test.

Deutsche Bank is in the process of large-scale restructuring to make the lender more efficient and profitable.

Reuters reported last week the bank was among other things considering scaling back or even completely shedding its retail banking business.

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