On Thursday, regulators in the U.S. and Britain said that Deutsche Bank has agreed to pay $2.5 billion to settle charges that its employees in London and Frankfurt had manipulated interest rates on trillions of dollars worth of debt, including mortgages and student loans, for their own profit between 2005 and 2009. "Markets do not just manipulate themselves," said New York State financial regulator Benjamin Lawsky. "It takes deliberate wrongdoing by individuals."
This is the largest settlement in the years-long interest-rate-fixing investigation by a hefty $1 billion — UBS agreed to a $1.5 billion penalty in 2012. Unlike some previous financial settlements, Deutsche Bank isn't avoiding legal ramifications: Its British subsidiary will plead guilty to fraud, and the bank is being forced to fire seven managers, six of them in London.
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