Deutsche Bank to pay $2.5B for rate violations

Deutsche Bank (DB) has agreed to pay $2.5 billion in a settlement with U.S. and British authorities over the manipulation of benchmark interest rates.

The U.S. Justice Department said Thursday that the subsidiary DB Group Services UK Limited has agreed to plead guilty to wire fraud.

"Deutsche Bank is the sixth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and today's criminal resolution represents the largest penalty to date in the LIBOR investigation," Assistant Attorney General Caldwell noted in a release.

The department's prior resolutions in the probe include pacts with Barclays Bank (BCS), UBS (UBS), The Royal Bank of Scotland, Coöperatieve Centrale Raiffeisen-Boerenleenbank, or Rabobank, and Lloyds Banking Group.

New York Financial Services Superintendent Benjamin Lawsky says Deutsche is firing employees involved and installing an independent monitor.

The bank says it has dismissed or disciplined employees and strengthened its controls. It says no member of its management board was involved.

The penalty includes $600 million to New York, $800 million to the Commodities Futures Trading Commission, $775 million to the Justice Department and about $340 million to Britain's Financial Conduct Authority.

Lawsky says violations from 2005 through 2009 included the London Interbank Offered Rate.