Libor scandal – German bank has to pay $ 2.5 billion penalty – Süddeutsche.de

• The German bank has agreed with authorities in the US and the UK on a comparison of the Libor scandal. The bank will pay $ 2.5 billion penalty.
• Staff had manipulated 2003-2011 interest rates in their favor, to be brushed trading profits.
• Many banks have made it like that. Customers could mean that the damage of 17 billion dollar will be created.

By Harald Freiberger

The German bank has to pay a high penalty because of the scandal to interest rate manipulations. In a comparison, the regulators in the UK, the US and the bank agreed to pay $ 2.5 billion. Your dealer had manipulated the important reference rate Libor for years, according to investigators. A condition of the comparison is that seven of them are dismissed.

What is the Libor?

Written out it’s called “Libor”. This is the interest rate at which banks lend money to each other. He is listed in London. There is not only a Libor, but several for different currencies and maturities. Easy to manipulate the interest rate was because he did not set about from official site, but was determined from a survey of eight to 16 major banks. These reported daily by 11 clock to the British Bankers’ Association, the rate at which they can borrow money from other banks. The Association took the highest and the lowest value and formed from the rest of the average. For the messages only few traders were responsible, who knew each untereiander. If they decided what to do, they could manipulate the Libor or down.

Why is it so important?

The Libor has on the global capital markets enormous importance. Financial products amounting to several hundred billion euros are linked to it. It is, for example, derivatives, so betting on stocks, bonds or currencies, which refer to a base rate. Also savings products of banks with a flexible interest rate often refer to the Libor.

Why did the banks do it?

The manipulations ran from 2003 to 2011. The bankers had two main motifs. One was ever wishing to gloss over on the height of the financial crisis of 2008, the own situation. They reported a lower interest rate than they actually had to pay; because other institutions did not trust them then and demanded correspondingly higher interest rates. However, this image should not have been at Deutsche Bank in the foreground. Instead, they wanted to obviously enrich themselves: Who knows how an interest rate developed trading positions the bank can correct it and make bets. During the investigation it was revealed that a UBS trader had to manipulate the Libor only by 0.01 percentage points to achieve a speculative gain of $ 459,000 for the bank. This also uses the traders, the more profit they generate, the higher is its own bonus

Where is the harm

According to estimates should bank customers have suffered a loss of about 17 billion dollars.? , Specifically, this is hard to determine. For to this end should be known, was the direction in which the Libor period in which manipulated. Only then customers could tell from her former securities positions, the damage they have suffered. There are a number of investors who want to complain. Lawyers working on analyzes, such as the Libor would have developed without the manipulations. They hope that they deliver the investigations of the British and American authorities to important information.

What has changed since, so that does not happen again?

The British Bankers’ Association was responsible for determination of the Libor withdrawn. For over a year ago is in charge of an independent organization called the banks IBA. The international supervisors also urged that the determination of interest rates in the banks is better controlled. For example, the German bank should have agreed that they will be monitored over the next few years from a supervisor, to send the authorities. In the Libor scandal in nearly three years also determines the German Financial BaFin. It is concerned primarily with the question of whether there was an organizational failure in determining the interest rate. The final report is still pending, but the investigators were already hinted that at least the top management was not aware of the manipulation. This is especially for co-chief Anshu Jain a relief that was investment banking chief at the time in question.