(Bloomberg) — Deutsche Bank AGs manipulation of Libor spanned eight years in offices around the world, involving at least 29 employees who rigged the price of money for millions of borrowers in an effort to make a quick profit.
Could we pls have a low 6mth fix today old bean? one Deutsche Bank derivatives trader in London asked an employee responsible for the banks rate submissions in April 2005. His U.S. counterparts were more blunt: Strap on a pair and jack up the 3M, one told a rate-setter in August 2008.
The exchanges were among dozens released by regulators in New York and London Thursday after they fined Deutsche Bank a record $2.5 billion for manipulating Libor and other benchmarks. The penalty was the biggest yet in the scandal; the settlement brings the total of fines to about $9 billion, paid by a dozen firms. UBS paid $1.5 billion in 2012, the most before today.
The messages show how Deutsche Bank traders — in New York, London, Frankfurt and Tokyo — enlisted employees responsible for submissions to benchmark rates and sought help from dealers at other firms including Barclays Plc, BNP Paribas SA, Citigroup Inc., Merrill Lynch, Societe Generale SA and UBS. By moving the rate a fraction of a percentage point, the Deutsche Bank traders could profit from bets on derivatives.
Im begging u, dont forget me, a Deutsche Bank desk head in London wrote in a Sept. 7, 2006 message, asking a counterpart at Barclays to make a low submission to Euribor, a benchmark for borrowing in euros.
Beggin u
pleassssssssssssssseeeeeeeeee … Im on my knees… he wrote. Insist as much as you can… my treasury is taking it to the sky… we have to counter balance it… Im beggin u…
Frankfurt-based Deutsche Bank was criticized by the U.S. Commodity Futures Trading Commission for permitting a culture of trader self-interest to exist and allowing traders to prioritize their profits over playing by the rules.
We deeply regret this matter, Co-Chief Executive Officers Anshu Jain and Juergen Fitschen said in a statement. This agreement marks another step in addressing the past.
Rates such as Libor — the London interbank offered rate — are supposed to represent banks true estimates of their borrowing costs. Deutsche Bank was once one among more than a dozen banks surveyed daily by the British Bankers Association. Their estimates were used to calculate Libor, a benchmark used in more than an estimated $300 trillion of securities, from interest-rate swaps to mortgages and student loans.
On Request
Deutsche Bank employees would alter the firms submissions to such benchmarks on request, the e-mails show.
if you need something in particular in the libors i.e. you have an interest in a high or a low fix let me know, one offered in a March 22, 2005, message released by the New York Department of Financial Services. Theres a high chance Ill be able to go in a different level, he said. Just give me a shout the day before or send an email from your blackberry first thing.
Deutsche Banks managers would even coordinate to make sure employees werent trying to move the rate in opposite directions.
I just want to check whether we have conflicting interests in the June 06 settlement, a Frankfurt-based euro desk manager wrote in a July 6, 2006, message released by theCFTC. It doesnt make sense if we try to push one way and u wld like to have it the other way around.
Thx vm for checkin, the London-based head of the money markets desk responded. Yes we would prefer a low fixing as well.