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German watchdog in special probe of Euribor banks
January 28, 2013 / 12:21 PM / 5 years ago

German watchdog in special probe of Euribor banks

FRANKFURT, Jan 28 (Reuters) - German financial watchdog Bafin escalated its investigation into the possible manipulation of the Euro Interbank Offered Rate (Euribor) last year to include a special probe at German banks.

“I cannot say how many banks or which banks are involved in the special probe,” a Bafin spokesman said on Monday, adding however that more than one bank was subject to more intense, on- site scrutiny by supervisors.

Bafin’s investigation into Euribor rate setting has been under way since mid-2012 and parallels an effort by international regulators into manipulation of the London Interbank Offered rate.

Euribor and Libor, which are based on estimates by large banks of how much they believe they have to pay to borrow from each other, are used to determine interest rates on trillions of dollars worth of contracts around the world.

German bank supervisors have been on site at the country’s flagship lender, Deutsche Bank, and Portigon, the successor bank to former regional state-backed lender WestLB, in connection with investigations into interest rate manipulation, sources close to the lenders told Reuters.

Daily Sueddeutsche Zeitung newspaper reported on Monday that four banks were targets of the special probe, including Deutsche and Portigon. The paper did not identify the other lenders.

Deutsche and Portigon declined comment. (Reporting by Jonathan Gould, Edward Taylor, Philipp Halstrick, Andreas Kroener)

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