The regulator says the fine is so large because Deutsche Bank also misled the regulator, a factor which could have hampered its investigation. In one instance, Deutsche Bank in error destroyed 482 tapes of telephone calls, which fell within the scope of an FCA notice requiring their preservation
Georgina Philippou, acting director of enforcement and market oversight, said: "This case stands out for the seriousness and duration of the breaches by Deutsche Bank – something reflected in the size of today's fine. One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn't limited to a few individuals but, on certain desks, it appeared deeply ingrained."
"Deutsche Bank's failings were compounded by them repeatedly misleading us. The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems and controls. This case shows how seriously we view a failure to cooperate with our investigations and our determination to take action against firms where we see wrongdoing."
Between January 2005 and December 2010, trading desks at Deutsche Bank manipulated its LIBOR and EURIBOR (known collectively as IBOR) submissions across all major currencies.
The misconduct involved at least 29 Deutsche Bank individuals including managers, traders and submitters, primarily based in London but also in Frankfurt, Tokyo and New York.
Misconduct went unchecked because of Deutsche Bank's inadequate systems and controls, says the FCA. Deutsche Bank did not have any systems and controls specific to IBOR and did not put them in place even after being put on notice that there was a risk of misconduct.
Deutsche Bank gave the FCA misleading information about its ability to provide a report commissioned by the German regulator, BaFin. The FCA's investigation was made more difficult and was delayed because Deutsche Bank failed to provide timely, accurate and complete information, says the FCA. Deutsche Bank also provided inaccurate information to the regulator about whether other records existed.
Deutsche Bank settled at an early stage of the investigation, qualifying for a 30% discount on its fine. Without the discount, the fine would have been £324 million.
The FCA has worked with other regulators in the United States on this case: today the Commodities Futures Trading Commission has imposed a financial penalty of $800 million, the US Department of Justice has imposed a financial penalty of $775 million and the New York Department of Financial Services has imposed a fine of $600 million. The fine imposed by the FCA is approximately $340 million.