Deutsche fined $9.8 million for control lapses

Bloomberg

Germany’s finance watchdog fined Deutsche Bank AG $9.8 million over its handling of submissions for Euribor, a reference rate at heart of a scandal that rocked industry.
The lender temporarily didn’t have effective systems, controls for contributions to benchmark, BaFin, said. While BaFin said Deutsche Bank has a right to appeal, the company said it accepts fine to create “legal certainty.”
More than a decade after the financial crisis revealed rampant misconduct and deficient controls, banks are still working through remediation measures and regulatory investigations. While comparatively small, the BaFin fine suggests that Deutsche Bank hasn’t fully delivered on pledges it made after facing the industry’s highest penalties in the Libor benchmark-rigging scandal.
Deutsche Bank has faced multiple legal and regulatory headaches which threatened to overshadow progress it made towards restoring
sustainable profitability.
Global banks have been slapped with billions of dollars of fines for trying to rig the rates, which were used to price everything from student loans to complex derivatives.

The US Justice Department told Deutsche Bank it might have violated a criminal settlement by failing to inform prosecutors about an internal complaint tied to the lender’s asset-management arm, a person familiar with the matter said this month.
Euribor is an acronym for the Euro Interbank Offered Rate. It’s derived from the average interest rate at which banks borrow from one another, similar to the better-known London Interbank Offered Rate.
Deutsche Bank agreed in 2015 to pay $2.5 billion in fines to US and UK regulators for attempts to manipulate the benchmark interest rates and said at the time that it was addressing related deficiencies.
Deutsche Bank said in relation to the BaFin’s findings that it has already implemented “initial measures” to improve controls in coordination with its supervisors. The bank “has no indication that the fined issue led to incorrect submissions to the benchmark administrator,” it said.
On the bank’s domestic German market, BaFin is tightening oversight to repair its image. The watchdog failed to detect the fraud at Wirecard AG, which collapsed in 2020 after revealing that 1.9 billion euros on its accounts was missing and likely never existed. After a series of reforms, BaFin has been hiring more financial professionals and forged a task force to carry out forensic probes to detect misconduct.
The maximum penalty for violations of European rules governing benchmarks is 10% of a company’s revenue, BaFin said.