German financial regulator BaFin has fined Deutsche Bank nearly $10 million for controls which is related to the Euribor interest rate. This is in a setback for the nation’s largest lender as it seeks to restore its reputation. The 8.66 million euro $9.77 million fine announced on Wednesday is the first imposed by BaFin under a 2018 regulation that seeks to prevent manipulation of Euribor, the Euro Interbank Offered Rate benchmark used in the financial industry.
BaFin said that the bank at times did not have in place effective preventive systems, controls and policies. Deutsche Bank said that it accepted the fine and had implemented measures to improve its controls regarding Euribor. The bank added that there was no reason to believe it had made incorrect rate submissions to the benchmark administrator. The period in question was between April 2019 and April 2020. BaFin found flaws in certain processes meant to safeguard the quality of data used to calculate the rate. This includes weaknesses in regular controls and other organisational precautions.
The bank has been subject to numerous regulatory and legal investigations including rate-rigging allegations that have involved multiple global banks. In April BaFin ordered Deutsche Bank to implement further safeguards to prevent money laundering. Under new leadership, BaFin has itself been trying to restore its image after it failed to spot wrongdoing ahead of the collapse last year of German payments company Wirecard.