Deutsche Bank faces Libor fine of more than $1.5bn

Deutsche Bank could face a more than $1.5bn penalty for allegedly manipulating Libor, which would be the biggest fine imposed so far on a bank accused of rigging the benchmark borrowing rate, according to people familiar with the case.

The German lender is in talks with US and UK authorities to settle the allegations and an agreement could be reached by the end of April, the people said. But the terms have not been finalised, which means the fine could go higher, the people added. A Deutsche Bank subsidiary could also plead guilty as part of the deal.

The New York Times first reported the settlement amount.

One relief for Deutsche Bank is that the agreement is likely include four agencies investigating the bank in the long-running Libor scandal, including New York's Department of Financial Services.

It had been unclear whether the DFS, run by Benjamin Lawsky, would be part of a settlement that would also include the Department of Justice, the Commodity Futures Trading Commission and the UK's Financial Conduct Authority.

In some past cases with banks, DFS has reached separate settlements from other authorities, a scenario Deutsche Bank had hoped to avoid. The Financial Times first reported in March that DFS was investigating Deutsche Bank in what is the agency's first Libor probe.

"We continue to work with the authorities that are reviewing interbank offered rates matters," the bank said in a statement.

Deutsche Bank has already paid a $633m fine by the European Commission for allegedly rigging yen Libor and the Euro Interbank Offered Rate, known as Euribor. So far, the largest Libor penalty has been paid by UBS, which was fined $1.5bn by US, UK and Swiss authorities.

Deutsche Bank is in the crosshairs of DFS in two other probes. The agency is investigating the bank for potential manipulation of foreign exchange rates, including whether algorithms on its trading platform were used to rig transactions, people familiar with the case said.

It is also looking into whether Deutsche Bank violated US sanctions because of its alleged past dealings with businesses in Iran.

The Federal Reserve has also pressured the German lender to improve its regulatory compliance programmes. A US subsidiary failed its first annual capital test in March.

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