)
Deutsche Bank’s co-chief executive, Anshu Jain, might have “knowingly made inaccurate statements” to Bundesbank, Germany’s central bank, during investigations into manipulation of the inter-bank rate setting process, the Financial Times reported online, citing a confidential report from German regulator BaFin.
BaFin declined to comment on the matter. Deutsche Bank told Reuters it disputed the allegation that Anshu Jain had misled Bundesbank.
Earlier this month, a source told Reuters that Germany’s financial watchdog, BaFin, heavily criticised Deutsche Bank in its report investigating attempts to manipulate inter-bank interest rates such as the Libor (London inter-bank offered rate). The German regulator has been investigating Deutsche Bank and the role it played during the financial crisis, when a global inter-bank lending rate mechanism was being manipulated.
BaFin recommended Deutsche Bank face “special banking supervisory measures” as a result, the Financial Times reported, quoting the BaFin report.
Jain, who resigned as chief executive effective June 30, was accused of having “knowingly made inaccurate statements” in a 2012 interview with the German central bank, the Financial Times said.
Bundesbank could not be reached for comment.
Jain is alleged to have told the central bank he had no knowledge of rumours of possible rigging in 2008, but contemporaneous e-mails about a meeting on the subject were forwarded to him at that time, the Financial Times said.
On Friday, Deutsche Bank said, “The BaFin report confirms our findings that no present or former member of Deutsche Bank’s management board or group executive committee instructed employees to manipulate inter-bank offered rates submissions or was aware of any attempted manipulation prior to June 2011, when certain misconduct first came to light during the bank’s investigation of this matter.”
In a statement, Deutsche Bank said, “Jain disputes as baseless the allegation that he misled Bundesbank in his 2012 interview. He understood Bundesbank’s question about when he first learnt of rumours of possible inter-bank offered rate rigging to mean rigging at Deutsche Bank itself, which he learned of in 2011, not rigging in the marketplace which was publicly reported in 2008.”
Deutsche further said that report also addressed concerns about control-related issues, a number of which had since been rectified and others of which the bank was still working to improve. “As we have not yet responded to the BaFin report as part of the regulatory process, we believe it would be inappropriate to comment further publicly at this time,” Deutsche Bank said.
From the report, the Financial Times quoted BaFin’s lead banking supervisor, Frauke Menke, as saying, “I have been astonished to learn [...] that the suggestion is that the audit by BaFin supposedly resulted in clearing the senior management of DB, especially Jain, and that supposedly no banking supervisory measures are expected…I expressly want to point out that this is not correct.”
