German watchdog deepens Libor probe at Deutsche Bank -sources

FRANKFURT Thu Dec 5, 2013 9:08am EST

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FRANKFURT Dec 5 (Reuters) - German banking watchdog Bafin has deepened its probe into manipulation of the Libor benchmark interest rate to see how much top managers at Deutsche Bank knew about it, financial sources familiar with the matter said on Thursday.

"Ultimately, it is about the responsibility of the board," one of the sources told Reuters.

Bafin has asked to see court documents in a wrongful dismissal case filed by four traders that Deutsche Bank had fired, in the hope of turning up fresh information

The bank accused the traders of violating company policy by inappropriately communicating with other traders over benchmark interbank lending rates.

The traders accused Deutsche Bank manager Alan Cloete, formerly head of global finance and foreign exchange, of calling an end to an internal investigation of Libor practices at the lender to avoid damaging investment bank head Anshu Jain, who was subsequently named co-Chief Executive.

Deutsche Bank denies Cloete ever said that, and has launched an appeal against a German labour court ruling that forced it to reinstate the four traders.

Cloete is currently Co-CEO of Deutsche's Asia-Pacific business.

Bafin and Deutsche Bank declined to comment.

Reuters reported from sources earlier this year that Bafin had found organisational problems at Deutsche but no evidence of wrongdoing on the part of members of the management board. (Reporting by Alexander Huebner and Philipp Halstrick; Writing by Jonathan Gould; Editing by Mark Potter)

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