Deutsche Bank allegations conspiracy theory, says executive

Prosecutors raid headquarters of Germany's largest bank amid allegations of rigging interest rates, however, bank executive says it nothing more than scam

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Deutsche Bank employees were scrutinised by the law enforcement on Tuesday as its offices in Frankfurt were searched by German prosecutors. The police were investigating client securities transactions, thus, according to the citation of the Wall Street Journal, a Deutsche executive has told a British trade group that the allegations were only a “conspiracy theory.”

Citing people familiar with the matter, the newspaper said David Nicholls, a witness, saw several number of employees fired for manipulation attempts on London interbank offered rate (Libor).

A telephone call to a British Bankers’ Association (BBA) official from 2008 was also discovered. During the recorded call which was re-played to a London jury on Tuesday, the main discussion was over the increasing concerns about the transparency of Libor.

“Banks do not collude to try to set a Libor rating,” he told John Ewan, the BBA official in charge of running Libor.

However, when the Deutsche Bank official argued that a manipulation of Libor cannot be a carried out by a single individual, Ewan asserted that “a cabal of them could,” referring to a group of people. In response Nicholls said “that’s an interesting conspiracy theory.” However, Ewan still backed his case.

The phone call was played during the trial of Tom Hayes, a former bank trader, who was accused of allegedly manipulating Libor. Before Hayes pleaded not guilty, he told the WSJ through a text message that the issue “goes much much higher than me.”

TRTWorld and agencies