Last week I wrote about the ongoing investigation into Deutsche Bank and its involvement in the LIBOR manipulation scandal. Now, according to the Financial Times, Deutsche Bank may have been one of 4 banks who colluded to rig benchmark rates to their advantage:
Regulators are focusing on at least four of Europe’s biggest banks as they investigate the attempted manipulation of the region’s benchmark interest rate, suspecting that Barclays’ traders were the ringleaders of a circle that included Crédit Agricole, HSBC, Deutsche Bank and Société Générale.
Evidence of links between traders at all four banks and Barclays’ former euroswaps trader Philippe Moryoussef is under scrutiny, people involved in the process have told the Financial Times.
The FInancial TImes also identifies the key traders alledgedly involved in the ciminal ring:
According to an FT investigation, Mr Moryoussef is alleged to have contacted a number of traders whom he knew at other banks, either through previous employment or via professional or personal networks. Regulators are looking at suspected communication with Michael Zrihen at Crédit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, all of whom no longer work at the groups in question, according to people familiar with the investigations.
What is interesting is that the LIBOR manipulation began much earlier than originally suspected. It was thought that the rate-rigging took place in the 2007 - 2009 time frame - a the height of the financial meltdown - to make certain banks look healthier than they actually were. But apparently the "ring" was active even long before the crisis:
However, the alleged involvement of traders at Crédit Agricole, HSBC, Deutsche and SocGen, predates the financial crisis by several years. Barclays’ settlement with regulators made it clear that there were two distinct periods of attempted manipulation – the first for trading gain, the second for broader reasons of financial stability.
All of the alleged illiegal activity at Deutsche Bank took place during the era of Josef Ackermann. And the London trader identified worked in the group overseen by Anshu Jain - Deutsche Bank's current CEO.