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 BaFin and other regulators are investigating more than a dozen banks
and brokerages over allegations they manipulated benchmark interest
rates such as Libor and Euribor, which are used to benchmark
trillions of dollars of financial products from derivatives to
mortgages and credit card loans.
BaFin launched a probe last year on which it is working with the
Bundesbank and accountant Ernst & Young <ERNY.UL>, delving into
suspected misconduct by individual traders and their counterparts at
other banks.
"The Ernst & Young report shows that insufficient efforts were made
to investigate and clear up events in the bank," weekly Der Spiegel
on Sunday quoted a BaFin report as saying. That BaFin report
summarized preliminary findings that the regulator submitted to
Deutsche Bank in August.
It is also still not clear "whether senior management was involved
in or had knowledge of possible manipulation attempts", it said,
adding the Bundesbank's part of the probe found "grave
organizational shortcomings" at Deutsche Bank.
BaFin declined to comment on the Spiegel report.
Deutsche Bank said investigations were underway and reiterated it
was closely co-operating with various regulatory probes including
the one being led by BaFin.
"We reiterate as per the current status of the investigations, we
can say that no current or former member of the management board had
any inappropriate involvement," a spokeswoman for the bank said.
Financial sources told Reuters last month that BaFin had deepened
its probe to see how much top managers at Deutsche Bank knew about
any manipulation.
The move comes as Deutsche Bank pursues an ambitious plan to
transform its corporate culture led by its co-chief executives
Juergen Fitschen and Anshu Jain, and as it works through a long list
of scandals, investigations and fines that came in the wake of the
financial crisis.
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According to Der Spiegel, BaFin in its report raised doubts about
how sweeping the cultural change really was.
"As new management, you announced cultural change... But in the case
at hand it appears that you did not take clear action, especially in
terms of staff," it said.
BaFin said that the fact that an internal probe at Deutsche Bank's
trading business in 2009 was stopped, "indicates that business
areas, in this case trading, influenced internal auditing in a
manner that may have been inappropriate".
Deutsche Bank traders who were recently fired from their jobs at the
bank have accused manager Alan Cloete, formerly head of global
finance and foreign exchange, of calling an end to an internal
investigation of Libor practices at the lender to avoid damaging
then-investment bank head Jain.
Deutsche Bank had denied Cloete ever said that, and has launched an
appeal against a German labor court ruling that forced it to
reinstate the four traders.
(Reporting by Thomas Atkins, Alexander
Huebner and Maria Sheahan; editing by Keiron Henderson)
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