Deutsche Bank slapped with $9.8 million fine by Germany’s regulator

Deutsche Bank slapped with €8.66 million fine by Germany's regulator
9 months ago
2 mins read

Germany’s financial sector regulator, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin), has fined Deutsche Bank AG €8.66 million ($9.8 million) over its handling of submissions for Euribor controls.

In a press release, BaFin stated that DeutscheBank, in some cases, lacked effective preventive systems and policies as required by the European Benchmarks Regulation.

According to the regulations, there is a need for effective benchmarks to curb manipulations and banks such as DeutscheBank are mandated to contribute towards determining the benchmarks. In this case, the Euro Interbank Offered Rate or Euribor is used as a benchmark. 

 The benchmark has become an essential aspect of banking transactions, from loans to complex derivative vehicles and euro-denominated contracts. 

“The objective of the Benchmarks Regulation is to ensure valid benchmarks and prevent manipulation. It requires contributors to have in place effective systems and controls. Contributors are natural or legal persons who contribute data for determining benchmarks,” BaFin said. 

According to BaFin, Deutsche Bank has a right to appeal the decision.

Notably, in recent months, BaFin has moved to tighten its regulatory mandate after high profile cases rocked the country’s financial sector. For instance, the regulator was on the spot for failing to detect the fraud at Wirecard AG that saw €1.9 billion going missing with a likelihood it never existed before. 

The latest BaFin punitive measure adds to other recent legal woes facing Deutsche Bank domestically and abroad. For instance, the United States regulator, the Securities Exchange Commission, also fined the lender in a bribery scandal.

As reported by Finbold, SEC fined the lender for a foreign bribery scheme in violation of the Foreign Corrupt Practices Act (FCPA). Deutsche Bank AG agreed to pay $120 million in fines alongside an additional $43 million to settle the charges to avoid prosecution. 

Furthermore, the bank’s legal woes in the United States resulted in the lender paying $150 million in fines over ties to convicted sex offender Jeffrey Epstein.

New York regulators accused the bank of compliance lapse in failing to monitor its relationships with the late Epstein. At the centre of the fine were payments to Russian models and $800,000 in what was described as suspicious cash withdrawals.


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Justinas Baltrusaitis

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.