The week between Christmas and New Year saw BaFin, Germany’s federal financial supervisory authority, impose an administrative fine of almost €9 million on Deutsche Bank for a breach of the European Benchmarks Regulation (BMR).
As a supervised contributor of data used in the determination of the Euro Interbank Offered Rate (Euribor), BaFin says Deutsche Bank at times did not have effective preventative systems, controls and policies in place within the meaning of Article 16 of BMR, which covers governance and control requirements for supervised contributors.
BMR is regarded as in part a response to the LIBOR scandal, involving collusion among the LIBOR panel banks to profit from derivative trades indexed on LIBOR interest rates.
Introduced in 2016, the regulation requires benchmark index providers to ensure the accuracy and integrity of benchmarks across the EU and aims to prevent manipulation. Breaches can be punished by imposition of a fine.
BaFin has beefed up its supervisory strength since itself coming in for criticism over its handling of the Wirecard debacle. The Deutsche Bank fine was one of several imposed by the watchdog’s Securities Supervision Directorate in December alone.