New York regulator Lawsky takes hard line on Deutsche Bank

Benjamin Lawsky, the New York banking regulator, has once again proven he is the scourge of Wall Street, helping to push Deutsche Bank's penalty for allegedly manipulating Libor to a record amount of $2.5bn.

Without the involvement of Mr Lawsky's Department of Financial Services, the German lender's fine would have been about $1.9bn, which would still have put Deutsche above the previous Libor record fine for UBS at $1.5bn.

Mr Lawsky is known for taking a hard line against Wall Street and has criticised other authorities in the past for being too soft on banks. DFS often steps in to stiffen penalties, including forcing executives to be fired.

As part of the Deutsche Bank settlement, DFS has ordered the bank to sack seven employees, including a London-based managing director.

However, Mr Lawsky's belated involvement in the Deutsche case has sparked familiar complaints that he swoops into an investigation at the last minute, when all the hard work has already been done by others, according to people familiar with the case.

Many European banks settled with global regulators in the Libor cases starting in 2012 while other investigations were ongoing, including the probe into Deutsche.

But at that time, DFS was not looking into Libor, partly because it was tied up with other cases, such as the alleged money laundering violations by Standard Chartered.

The StanChart case was one of the first signs that Mr Lawsky would act on his own when he felt it was necessary, securing a $340m settlement that was separate from the bank's deal with the US Justice Department.

Other European banks are not under the jurisdiction of DFS, which regulates banks with a New York state licence.

In late 2014, DFS began looking at the Libor-Deutsche case in what is its first and only Libor investigation so far, according to people familiar with the case.

Although the agency came in later, it was DFS that pushed for individual accountability, including requiring the bank to fire the seven employees.

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