Deutsche Bank has been fined nearly $10 million by the German financial regulator BaFin for controls related to the Euribor interest rate, a setback for the country's largest lender as it seeks to rebuild its reputation.
The fine of 8.66 million euros ($9.77 million) announced on Wednesday is the first imposed by BaFin under a 2018 regulation aimed at preventing Euribor, the Euro Interbank Offered Rate benchmark used in the financial industry, from being manipulated.
"The bank at times did not have in place effective preventive systems, controls and policies," according to BaFin.
Deutsche Bank said it had accepted the fine and had taken steps to improve its Euribor controls.
The bank also stated that there was no reason to believe it had sent the benchmark administrator incorrect rate submissions.
According to a source familiar with the situation, the time period in question was April 2019 to April 2020.
According to the source, BaFin discovered flaws in certain processes aimed at ensuring the quality of data used to calculate the rate, including flaws in regular controls and other organizational safeguards.
Over the last decade, the bank has been the subject of numerous regulatory and legal investigations. This has included allegations of rate-rigging involving multiple global banks.
BaFin ordered Deutsche Bank to implement additional anti-money laundering safeguards in April.
After failing to spot wrongdoing ahead of the collapse of German payments company Wirecard last year, BaFin has been trying to rebuild its image under new leadership.
By fLEXI tEAM