Deutsche Bank cooperates with EU bond pricing investigation

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Deutsche Bank trading room in London.

(Source: mauritius images)

Deutsche Bank said it was cooperating with European Union antitrust authorities in an investigation into an alleged bond swap cartel involving four banks, with sources adding that Germany’s largest lender is acting as a primary witness in the case.

On Thursday, the European Commission accused traders from all four banks – Deutsche, Credit Agricole, Credit Suisse and another lender – of exchanging market-sensitive information on several occasions between 2009 and 2015 in an attempt to manipulate bond prices denominated in dollars.

The Commission did not explicitly name the banks, but said its investigation focused on the conduct of traders in the four institutions and contacts between them, mainly via online discussion forums. The fourth bank, Handelsblatt said, could be Bank of America, which, along with Deutsche, agreed to pay $ 65.5 million (€ 57.3 million) last year to settle the US price manipulation dispute. bond market.

Regulators around the world have penalized the financial industry by billions of euros in recent years for rigging financial benchmarks. If found guilty of violating EU antitrust rules, banks face fines of up to 10% of their global turnover. At its discretion, the Commission may offer leniency to whistleblowers.

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Dodge the bullet

Deutsche Bank said it did not expect to be fined because the lender “was proactively cooperating with the European Commission on the matter,” a spokesperson said. Germany’s largest bank serves as the main witness in the investigation, according to financial sources. bank declined to comment.

Credit Suisse also said it was also cooperating with EU authorities in connection with the investigation, which the lender said was limited to an employee who left the bank in 2016.

Deutsche Bank shares were little changed around € 7 on Friday, after slipping 7% a day earlier. To add to the bank’s woes, Canadian investment bank RBC lowered its revenue estimates for Deutsche Bank on Thursday due to “lack of cost flexibility” and the unfavorable outlook in the investment bank. Over the past year, Deutsche Bank shares have fallen 55%.

The bank’s image has also been seriously tarnished by accusations of tax evasion and money laundering. In late November, prosecutors launched a full-scale search of the lender’s headquarters in Frankfurt on suspicion that employees had helped smuggle dirty money into tax havens under the bank’s accounts.

Yasmin Osman is a journalist at the Handelsblatt banking office in Frankfurt. Jeremy Gray adapted this story in English with additional coverage from Reuters. To contact the author: [email protected]


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