Deutsche Bank to Pay $2.5Bln Fine to US, UK Financial Regulators

Deutsche Bank stock falls after their involvement in interest rate manipulation resulted in US and UK financial regulators slapping them with a hefty $2.5 billion fine.

MOSCOW (Sputnik) — Germany's biggest lender Deutsche Bank (DB) will pay a $2.5 billion fine to US and UK financial regulators, and sack employees found to have manipulated benchmark interest rates, authorities of both countries announced Thursday.

DB will pay a £227 million ($340 million) fine to UK's Financial Conduct Authority (FCA), and the rest to the US State Department of Financial Services in New York, the Commodities Futures Trading Commission and the US Department of Justice.

FCA's director for market oversight, Georgina Philippou, said violations were not just sporadic but apparently "deeply ingrained."

"This case stands out for the seriousness and duration of the breaches by Deutsche Bank – something reflected in the size of today's fine," she said.

The case focused on manipulations of the London Inter-Bank Offered Rate (Libor) and its euro equivalent Euribor. Libor and Euribor are primary interest rates that banks charge when lending to each other. They are fundamental to the operation of international financial markets.

The UK regulator said 29 employees in London, Frankfurt, Tokyo and New York were involved. The high fine was justified because the German bank also "misled" the regulator, and hampered its investigation.

DB shares dropped 1.8 percent in Frankfurt on the news of the regulators' decision to punish Germany's largest bank, the Financial Times said.

Several other banks have been fined millions of dollars over the past three years as regulators took action to improve industry standards around benchmarks.