Libor rigging scandal: German regulator alleges negligence by Deutsche executives

Germany's Deutsche Bank is facing fresh troubles over the manipulation of London Interbank Offered Rate (Libor), as the country's financial regulator alleged that the bank's executives acted "negligently" over the issue.

The Financial Times, citing a report into Libor-manipulation by German financial regulator BaFin, reported that the bank's outgoing co-CEO Anshu Jain may have "knowingly made inaccurate statements" to Germany's Bundesbank during a 2012 interview about the benchmark-setting process.

Jain, who stepped down as joint chief executive earlier in June, allegedly told the central bank he had no knowledge of rumours of possible rigging in 2008. Nevertheless, the report says that contemporaneous emails about a meeting on the subject were forwarded to him at the time.

BaFin's report may lead to further action by authorities on Deutsche Bank, FT added. The report asks for special "banking supervisory measures" for Deutsche.

"I consider the failures with which Mr Jain is charged to be serious," wrote Frauke Menke, head of banking supervision at the German watchdog, in the report, adding that the co-CEO created an environment "which favoured behaviour involving the exploitation of conflicts of interest."

Meanwhile, Deutsche rejected the allegations.

"Mr Jain disputes as baseless the allegation that he misled the Bundesbank in his 2012 interview. He understood Bundesbank's question about when he first learned of rumours of possible Ibor rigging to mean rigging at Deutsche Bank itself which he learnt of in 2011, not rigging in the marketplace which was publicly reported on in 2008," the bank was quoted as saying.

Deutsche in April paid the largest fine of $2.5bn (£1.6bn, €2.2bn) to authorities in the US and UK in order to settle claims that it rigged Libor, a benchmark interest rate that underpins about $350tn of debt across the globe.

The scandal, also involving a number of other major banks, shocked the financial world. The banks have so far paid $9bn in total fines in connection with the rigging scandal.