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Libor rigging scandal: Pandora’s box opens up

16 Aug 2012
Libor rigging scandal: Pandora’s box opens up
  • In 2007, Barclays alerted the US regulators about the low interbank rates (LIBOR) being submitted by banks which started the investigation.
  • In August 2012, a joint New York-Connecticut investigation of 7 banks found libor anomalies.
  • Later, the regulators released a cache of emails, electronic messages and phone calls showing the attempts to move the rate used to price £3.5 Tn of financial contracts.

What is Libor?

Fact
Definition

London Interbank Offer Rate (Libor) is the average interest rate calculated through the submitted interest rates by major banks for internal borrowing.

$2.5 Billion fine slapped on Deutsche Bank

23 Apr 2015
 $2.5 Billion fine slapped on Deutsche Bank
  • A record fine of $2.5 billion was levied on DB for rigging Libor.
  • The bank has also been directed to fire 7 employees: 1 managing director, 4 directors and 1 vice-president, all based in London, together with 1 Frankfurt-based vice-president for being obstructive in the investigations.
  • The total of $2.5bn includes $600 Mn to NYDFS, $800 Mn to CFTC and $775 Mn to DoJ.

The downhill descent accelerates

Fact
Information

As if the $ 2.5 Bn fine was not enough, Deutsche Bank paid $925 Mn to Leo Kirch to end a long-running dispute with the media mogul.

Deutsche Bank makes way for some major downsizing

27 Apr 2015
 Deutsche Bank makes way for some major downsizing
  • Deutsche Bank announced the closure of almost 200 of its 700 branches by 2017 in Germany to cutback costs.
  • The bank has also decided to cut down the operational costs by 3.5 billion euros ($3.8 billion) by 2020.
  • 200 billion euros ($217.5 billion) will be slashed in investment bank assets along with a reduced number of countries of operations.

Investor revolt intensifies within Deutsche Bank quarters

21 May 2015
 Investor revolt intensifies within Deutsche Bank quarters
  • The high fine led to extreme cost cutting of over $50 billion, which triggered a voter revolt.
  • In its annual meeting on 21 May 2015, Deutsche Bank shareholders doled out a vociferous vote of disapproval.
  • 39% of investors refused to support the executive performances.
  • The investors showed their disapproval with Deutsche's profit growth, alarming regulatory fines and the plans to restructure the bank.

Why is Anshu Jain stepping down?

7 Jun 2015
 Why is Anshu Jain stepping down?
  • Deutsche Bank's former co-CEO Anshu Jain's decision was due to the criticism in media and from labor unions in Germany over the cutbacks and the decision to close several branches.
  • Moreover, only 61% of shareholders showed faith in the bank's strategic plan. This has been a record-low approval in the history of Deutsche Bank annual meetings.

John Cryan takes over as Deutsche Bank’s CEO

8 Jun 2015
 John Cryan takes over as Deutsche Bank’s CEO
  • Deutsche Bank announced that John Cryan will take over as its new CEO.
  • Cryan was formerly the CFO at UBS and has served on Deutsche's Supervisory Board since 2013.
  • Anshu Jain will continue to act as the interim CEO till June end and will stay on as a consultant till January 2016, while his co-CEO Juergen Fitschen will exit on 19 May 2016.