Deutsche Bank faces Libor questions from German lawmakers
FRANKFURT, Nov 28 ― Deutsche Bank’s compliance chief Stephan Leithner and former board member Hugo Baenziger face skeptical German lawmakers today as parliamentarians seek answers about how banks manipulated global benchmark interest rates.
Birgit Reinemund, a lawmaker with the Free Democrats (FDP), invited Deutsche Bank to attend a parliamentary hearing as Berlin politicians join a raft of regulators and politicians trying to understand how some banks manipulated the London Inter Bank Offered Rate (Libor), a benchmark interest rates used to price trillions of dollars worth of contracts.
Parliamentarians had invited co-chief executive Anshu Jain, a former head of investment banking, but the lender decided to send board member Leithner in his place, sparking accusations that Jain has “chickened out”.
Even Jain’s former boss, Josef Ackermann, accused him of demonstrating a lack of leadership for not going to the hearing.
The move strains the already tense relationship between bankers, who prefer to keep out of the public eye, and politicians, who are eager to demonstrate their grip on the freewheeling world of global finance.
In the United States, Goldman Sachs chief executive Lloyd Blankfein faced a barrage of politically charged questions at a Senate Governmental Affairs Subcommittee about the causes of the financial crisis.
The manipulation of Libor burst into the headlines in June when British bank Barclays was fined a record US$450 million (RM1.4 billion) by UK and US authorities for allowing traders to manipulate rates during the 2007/08 credit crunch.
Deutsche Bank said in July initial findings from an internal probe into alleged rigging of global interest rates found that no members of the management board behaved inappropriately.
The probe revealed that two former Deutsche Bank traders may have been involved in colluding to manipulate global benchmark interest rates.
Libor rates submitted by banks are compiled by Thomson Reuters, parent company of Reuters, on behalf of the British Bankers’ Association. ― Reuters