Libor scandal: Deutsche Bank admits some staff involved

BBC News, 31 July 2012

Libor scandal 

• Barclays scandal: Key players
• Timeline: Libor-fixing scandal
• Did anyone lose out?
• How big could the scandal get?

Deutsche is to shed 1,900 staff and
review staff pay after reporting a 63%
fall in second quarter profit

Deutsche Bank has confirmed that a "limited number" of staff were involved in the Libor rate-rigging scandal.

However, it said an internal inquiry had cleared senior management of taking part in attempts to manipulate the rate at which banks lend to each other.

Deutsche Bank also announced it is to shed 1,900 staff, mostly outside Germany, due to the European economic downturn.

Most of the posts - 1,500 - will go from Deutsche's investment bank.

Libor scandal

Authorities in Europe, Japan and the United States are investigating more than a dozen banks about suspected attempts to manipulate the London interbank offered rate (Libor) and its equivalents such as Euribor.

The key lending rate is used to price trillions of dollars worth of financial assets.

Earlier this month, Barclays chairman and chief executive both resigned after the bank was found guilty of trying to rig the Libor rate by UK's Financial Services Authority.

In a letter to staff, Deutsche Bank's chairman of directors Paul Achleitner said: "A limited number of employees, acting on their own initiative, engaged in conduct that falls short of the Bank's standards, and action has been taken accordingly."

Job cuts

The job cuts announced by Deutsche Bank are part of restructuring plans aimed at saving 3bn euros ($3.7bn; £2.4bn).

The bank also said it was reviewing its pay and compensation deals for staff.

Deutsche also reported a 63% fall in second quarter earnings to 375m euros, from 969m euros last year.

In a joint statement, Deutsche's co-chairmen Jürgen Fitschen and Anshu Jain said: "The European sovereign debt crisis continues to weigh on investor confidence and client activity across the bank."

As late as April this year, Deutsche had insisted it would not need to make any job cuts.

Shares in Deutsche were up 2.3% to 25.42 euros in afternoon trade in Frankfurt.

Related Article:

Libor Fraud Was Happening In 1991, Trader Says, 17 Years Before Timothy Geithner Claims He Knew