A Deutsche Bank logo adorns a wall at the company's headquarters in Frankfurt, Germany June 9, 2015. REUTERS/Ralph Orlowski/File Photo
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Deutsche Bank has agreed to pay $220m in a settlement with US states that resolves claims it manipulated benchmark interest rates, closing another chapter in the chequered US history of Germany’s biggest lender.

The agreement, announced on Wednesday, adds to the long list of penalties extracted by regulators around the world over the rigging of Libor, the rates that underpin hundreds of billions of dollars of loans and hundreds of trillions of derivatives.

An investigation by the AG’s office found that, as early as 2005 and continuing throughout the financial crisis, Deutsche defrauded counterparties by failing to disclose that its submissions to the Libor-gathering panel were false or misleading, while allowing traders to influence other banks’ submissions to benefit their own trading positions. 

“We will not tolerate fraudulent, manipulative or collusive conduct that interferes with or undermines confidence in our financial markets,” said Eric Schneiderman, the New York attorney-general, speaking on behalf of 45 states which joined the action. “As a result of Deutsche Bank’s misconduct, government entities and charities were defrauded of funds that otherwise could have been used to benefit New Yorkers.” 

Deutsche is the second big bank to reach a multi-state settlement brokered by New York, following Barclays’ $100m deal last August. “Several” banks are still under investigation, said the attorney-general’s office, declining to specify how many of the 16 banks which made US dollar Libor submissions were still under the microscope. 

“This settlement resolves the bank’s final pending US regulatory inquiry related to Libor,” Deutsche said, in a statement. 

The settlement marks yet another run-in with regulators in the US for the Frankfurt-based bank, where chief executive John Cryan has vowed to tighten risk and compliance standards within its sprawling global operations. 

Last year the bank resolved “over two dozen major litigation matters”, it disclosed in a filing in March, including making a $7.2bn settlement with the US Department of Justice over the mis-selling of residential mortgage-backed securities. This year Deutsche has struck deals with US regulators over offences ranging from alleged collusion in the foreign-exchange market to violations of the Volcker ban on proprietary trading. 

The agreement this week covered several extracts of exchanges between traders within Deutsche, and outside the bank, that suggested that the rates submitted by the bank were not an honest reflection of prevailing rates in the market.

In February 2006, for example, Deutsche’s submitter of US-dollar Libor rates wrote to an inter-dealer money broker: “How are we looking now? . . . Have you spoken to James at HBOS? . . . Need him to not get too carried away today!” The broker responded: “James boss Alex fixes Libors at HBOS — should have invited him skiing.”

In May 2008 one US dollar Libor trader at Deutsche wrote to a peer at another bank, “LIBOR is a joke!!!!!!!” The other trader replied: “Who put the LIE in LIBOR?” 

In April 2015 Deutsche agreed to a $2.5bn settlement for Libor-rigging with the US’s Department of Justice, the Commodity Futures Trading Commission, the New York Department of Financial Services and the UK’s Financial Conduct Authority. 

The German bank is due to report its earnings for the third quarter on Thursday.

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