As you may have heard, earlier today Deutsche Bank agreed to pay $2.15 billion to settle allegations that its employees engaged in a whole lotta interest rate manipulation. Additionally, the firm plead guilty to criminal charges and "acknowledged that its internal monitoring systems were insufficient to prevent the manipulation of...Libor." So Deutsche is going to work on getting the latter up to speed and hop on cutting that 10-figure check, but before we put this tale to bed, a trip down memory lane is in order, courtesy of the best instant messages regulators went through to build their case.
They touch on:
* Favors, the big kind:
London MMD Manager: [Frankfurt Regional Manager], I have a big favor to ask you.
Frankfurt Regional Manager: Tell me.
London MMD Manager: And, uh ... a big, big, big favor.
Frankfurt Regional Manager: Ok.
London MMD Manager: Bon. In March ...
Frankfurt Regional Manager: Yes.
London MMD Manager: We have, eh, we have 20 yards of a 6 month fixing. [ . . . ] A
lot in in March. So, basically, um, basically, uh, we need
high 6 month.
Frankfurt Regional Manager: You need high 6 month, ok.
London MMD Manager: High 6 month, yes.
Frankfurt Regional Manager: Sure, we will get high 6 month, no worries.
London MMD Manager: High.
Frankfurt Regional Manager: We will get high 6 month.
London MMD Manager: Es . . . especially on the IMM, on the 19th I have 7 yards.
London MMD Manager: you're going to help me, promise me?????
Barclays Senior Euro Swaps Trader: ahaah of course, mate, it looks like it wants to move big time [ . . .]
London MMD Manager: seriously mate, are you really helping [London MMD Euro Trader]
Barclays Senior Euro Swaps Trader: I'm going to help her big time
* Getting down on one's knees in a $3,000 suit:
On 7 September 2006, Manager B reminded External Trader A: “I’m begging u pleassssssssssssssseeeeeeeeee I’m on my knees”. Manager B repeated his request: “can u beg the [Panel Bank 2] guy as well?” The External Trader replied: “ok I’m telling him”
New York U.S. Dollar Senior Trader: Oh bullshit…..strap on a pair and jack up the 3M. Hahahahaha
The submitter at Panel Bank 1 replied: “no problem. I had not forgotten. The brokers are going for 3.372, we will put in 36 [3.36] for our contribution” External Trader A sent Manager B a copy of Panel Bank 1’s reply. Manager B replied: “I love you”
The Most Cringeworthy Chat Messages From The Deutsche Bank Libor Transcripts [Bloomberg]
Final Notice: Deutsche Bank [Financial Conduct Authority]
Examples of Misconduct from Written Communications [CFTC]
Deutsche Bank says no executives found to be aware of Libor misconduct [Reuters]