Last Thursday, Deutsche Bank agreed to a deferred prosecution agreement, the imposition of an independent monitor and a $2.5 billion fine to resolve regulator claims the banking giant's traders manipulated the London Interbank Offered Rate (LIBOR). So what will be the takeaways going forward?
Look For More Monitors In Antitrust, Financial Settlements
The DOJ and New York Division of Financial Services has promoted that part of the agreement which essentially saddles them with at least one independent monitor to assure the bank remains in compliance with antitrust and market manipulation laws.
Deferred Prosecution Agreements (DPAs) Still Draw Criticism From Wall Street Opponents
The Justice Department has drawn intense criticism from Wall Street’s opponents for failing to bring individual cases for the financial crisis, and for its continued use of deferred prosecution agreements with the big banks in Libor manipulation, sanctions violations and tax evasion cases. Given this most recent deal, that criticism in unlikely to change anytime soon.
More Libor Settlements Are Coming
Although Deutsche Bank got hit with the largest fine for manipulating Libor, it was not the first and will not be the last. Deutsche is the sixth bank to be slapped with a major fine over the LIBOR manipulation investigation. The investigation of other major banks continues with additional fines and DPA's sure to follow.
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