US and British regulators have fined Deutsche Bank a record $2.5 billion for manipulating a key interbank borrowing rate that benchmarks for hundreds of trillions of dollars of financial products and loans worldwide.
While US regulators fined Germany's largest bank $2.175 billion, Britain's Financial Conduct Authority (FCA) imposed a £227 million ($340 million) penalty for LIBOR and EURIBOR-related (collectively known as IBOR) misconduct.
The fine is related to the period between January 2005 and December 2010, when trading desks at Deutsche Bank allegedly manipulated its IBOR submissions across all major currencies.
LIBOR and EURIBOR are based on daily estimates of rates (submissions) at which banks on a panel can borrow funds in the inter-bank market. They are fundamental to the operation of both UK and global financial markets, including those relating to interest rate derivatives contracts.
The record penalty takes the total fines imposed on some of the world's top financial institutions to $8.5 billion in the rate rigging scandal, and dwarfs the previous $1.5 billion demanded in 2012 from Switzerland's UBS.