Deutsche Bank slapped with £7m fine over weak rate-rigging controls

German investment banking giant Deutsche Bank has been slapped with a £7.3m fine by Berlin’s finance regulator for failing to strengthen internal controls to prevent rate-rigging.

BaFin said Deutsche Bank did not have “effective preventive systems, controls and policies” to maintain the “integrity and reliability” of data relating to Euribor, the rate-setting system used to price Eurozone financial assets.

As a result, the watchdog fined the investment bank over £7m. The initial fine was higher than the final settlement.

It is the regulator’s second largest ever fine. Deutsche Bank actually holds the top spot for BaFin’s record penalty after the watchdog slapped it with a £33.6m fine in 2015 due to weak anti-money laundering controls.

The latest fine comes after Deutsche Bank was ordered to pay £1.8bn after several of its employees were found to have manipulated Libor, the benchmark rate-setting mechanism that underpins trillions of dollars of loans and derivatives.

A spokesperson for Deutsche Bank said BaFin moved after examining the bank’s internal controls for submissions of Euribor data.

The probe looked at processes in place between early 2019 and 2020, a person familiar with the matter said.

“Deutsche Bank has no indication that the fined issue led to incorrect submissions to the benchmark administrator,” the spokesperson added.