US regulators just slapped Deutsche Bank with a £2.5 billion fine and mocked its traders
The regulators also took the time out to publicly humiliate the guys who seem to have been pretty openly trying to manipulate these rates in their favour
According to the New York Department of Financial Services:
Deutsche Bank will pay $2.5 billion, terminate and ban individual employees who engaged in misconduct, and install an independent monitor for New York Banking Law violations in connection with the manipulation of the benchmark interest rates, including the London Interbank Offered Bank ("LIBOR"), the Euro Interbank Offered Rate ("EURIBOR") and Euroyen Tokyo Interbank Offered Rate ("TIBOR") (collectively, "IBOR").
But it doesn't end there.
The NYDFS goes into some excruciating detail, mocking the employee chat records showing the attempted manipulation (emphasis theirs):
For example, on February 21, 2005, a trader requested of another trader who performed submitter duties on a back-up basis, "can we have a high 6mth libor today pls gezzer?" The trader/submitter agreed, "sure dude, where wld you like it mate ?" The trader replied, "think it shud be 095?" The trader/submitter replied, "cool, was going 9, so 9.5 it is." The trader joked, "super - don't get that level of flexibility when [the usual submitter] is in the chair fyg!" Similarly, on December 29, 2006, a trader wrote to a submitter, "Come on 32 on 1. Mth… Cu my frd." The submitter agreed, "ok will try to give you a belated Christmas present…!"
They go on:
On September 7, 2006, a London desk head attempted to obtain a low EURIBOR submission from an external banker at Barclays, "I'm begging u, don't forget me… pleassssssssssssssseeeeeeeeee… I'm on my knees…" The external banker replied, "I told them 1 m up is that right?" The London desk head continued, "please pal, insist as much as you can… my treasury is taking it to the sky… we have to counter balance it… I'm beggin u… can u beg the [a panel bank] guy as well?" The external banker agreed, "ok, I'm telling him."