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Regulators said the size of the fine reflected the fact that Deutsche Bank had misled authorities, deleting hundreds of tapes of telephone calls

LONDON. — Deutsche Bank has been hit with the biggest fine for Libor manipulation in history, with British and American regulators handing the German financial giant a £1,7 billion penalty.

The Financial Conduct Authority, and the US Commodities Futures Trading Commission, Department of Justice and New York’s Department of Financial Services, levied the fine yesterday afternoon.

The $2,5 billion (£1,66 billion) fine exceeds the $1,5 billion handed to UBS for Libor manipulation in 2012, and is more than the £952 million that Barclays, Royal Bank of Scotland and Lloyds have paid to UK and US authorities between them.

Regulators said the size of the fine reflected the fact that Deutsche Bank had misled authorities, deleting hundreds of tapes of telephone calls.

Documents from the FCA showed how managers at the bank begged traders at other banks including Barclays, UBS and Citibank, to artificially move Libor and Euribor, UK and European interest rate benchmarks which are used to price financial products worth trillions of dollars around the world.

US regulators also fined Deutsche Bank for manipulating Tibor, the Tokyo benchmark for interbank yen borrowing.

“I’m begging u please I’m on my knees,” one manager wrote to a Barclays trader in 2006, asking him to lower his submission for Euribor in an attempt to drive the benchmark down.

On a separate occasion, after the Barclays trader had convinced other traders to lower their submissions, the manager wrote: “I love you”. The fine is the first time that the New York DFS, spearheaded by the aggressive Benjamin Lawsky, has penalised a bank in relation to Libor.

As part of the settlement, Deutsche Bank must install an independent monitor and fire seven employees who remain at the bank, six of them in London.

One Deutsche Bank vice president wrote that the activity was “a corrupt fixing and DB is part of it!”

The FCA fine is itself the biggest the UK regulator has levied in its history related to Libor. The watchdog said its investigation was held up because Deutsche Bank failed to provide correct information. In one instance, the bank mistakenly destroyed 482 tapes of telephone calls.

Georgina Philippou, the regulator’s acting director of enforcement and market oversight, said: “This case stands out for the seriousness and duration of the breaches by Deutsche Bank — something reflected in the size of today’s fine.

“One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained.”

The FCA fined the bank the equivalent of $300 million, while the CFTC, DoJ and DFS levied penalties of $800 million, $775 million and $600 million respectively.

Deutsche Bank said on Wednesday night it was putting aside an extra €1,5 billion (£1,1 billion) for litigation costs, fuelling speculation that the hefty fine would come yesterday.

The penalty, which is expected to be one of the last FCA fines for Libor manipulation, comes almost three years after the scandal first emerged when Barclays was handed a £290 m fine. — Telegraph.