Former Deutsche Bank Employee Claims Bank Took Big Libor Bets During Crisis Because It Could Influence Rates

Deutsche  bank

Former Deutsche Bank Employee Claims Bank Took Big Libor Bets During Crisis Because It Could Influence Rates

The Wall Street Journal has an exclusive story based on a whistleblower leak, apparently with supporting transaction records.

In 2008, Deutsche Bank made very large bets instruments linked to one, three, and six month dollar, euro, and sterling Libor, that differential between one month rates versus the three and six month tenors would widen as the crisis became more severe. The German bank reportedly made over €500 million on these trades.

What is significant is that these were very large wagers, particularly at a time when most banks were desperate to shed risk. This is the guts of the story:

The documents from the former Deutsche Bank employee set out how traders in London and New York working for the German bank’s global-finance unit successfully bet that borrowing costs in euros, U.S. dollars and British pounds over three- and six-month periods would rise faster than one-month interest rates because of deepening stress throughout the global financial system.

The interest-rate bets included an estimated potential profit of €24 million for each hundredth of a percentage point that the three-month U.S. dollar Libor increased compared with the one-month U.S. dollar Libor, according to the documents.

The former employee has told regulators that some employees expressed concerns about the risks of the interest-rate bets, according to documents. He also said that Deutsche Bank officials dismissed those concerns because the bank could influence the rates they were betting on.




2 Responses to “Former Deutsche Bank Employee Claims Bank Took Big Libor Bets During Crisis Because It Could Influence Rates”
  1. TheHutMaster says:

    Douche Bag Bank is getting away with unbelieavable crimes. Is it time for US to admin their demize? I sure do.

    “Fight the Good Fight”
    Every Minute, Every Day.

  2. kate says:

    Douche Bag (oops, Deutsche Bank) found “mostly” innocent. Soooo does that mean “somewhat” guilty? It is all too much to believe. Money Laundering, fraud, forgery, money funneling to terrorists and drug cartels, theft, deceit, racketeering, unlawful foreclosures, robo-signing, bribes, rate steering, predatory lending, tax evasion, rate manipulation, false information to SEC, blatantly fraudulent appraisals, altering loan applications, perjury, alteration of legal documents just to name a few. Yet we watch in horror and utter disbelief as our DOJ goes on TV and states they can’t find any actual fraud or violations that break the law……..SAY WHAT. We have judges that won’t even listen or let a homeowner speak based on just the fact of owing someone money so the laws that the servicers break don’t count…..SAY WHAT. Can these same justices answer me this one question which is: a killer is arrested and brought to trial for murder. Killer does not deny the murder and actually admits it. There were 20 witnesses that saw the murder take place. Problem – the suspect was not read his/her miranda rights when arrested. This murder walks away based on a legal technicality. When people are outraged by this, the defense legal eagles, judges and our justice system tell us this is how it must be to make sure a defendant gets due process and that our legal processes are followed to the letter of the law. Fairness or lack thereof is not the issue. A judge should not be concerned with who does or does not get a free house or what is fair or not fair; the judge is there for one purpose and one purpose only…to see that the letter of the law is carried out. It is all like something out of the twilight zone. Just plain crazy.

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