Deutsche Bank Libor fine: Seven crazy things traders said about Libor that cost the bank billions

 
Lynsey Barber
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Trader conversations at Deutsche Bank were recorded

Deutsche Bank has been fined billions of pounds over misconduct in relation to fixing inter-bank lending rates Libor, Euribor and Tibor.

Transcripts released by the New York Department of Financial Services (NTSDFS) reveal the banter between traders on setting the rates.

Here are seven crazy conversations had by traders (emphasis ours).

1. The geezer

On 21 February 2005, a trader requested of another trader who performed submitter duties on a back-up basis:

Trader 1: "can we have a high 6mth libor today pls gezzer?"

Trader 2: "sure dude, where wld you like it mate ?"

Trader 1: "think it shud be 095?"

Trader 2: "cool, was going 9, so 9.5 it is."

Trader 1: "super – don’t get that level of flexibility when [the usual submitter] is in the chair fyg [for your guidance]!"

2. Santa's little helper

On 29 December 2006, a trader wrote to a submitter:

Trader: "Come on 32 on 1. Mth… Cu my frd [friend]."

Submitter: "ok will try to give you a belated Christmas present…!"

3. The beggar

On 7 September 2006, a London desk head attempted to obtain a low Euribor submission from an external banker at Barclays:

London trader: "I’m begging u, don’t forget me… pleassssssssssssssseeeeeeeeee… I’m on my knees…"

External trader: “I told them 1 m up is that right?”

London trader: “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?”

External trader: “ok, I’m telling him.”

4. "People just randomly make those numbers up"

On 21 August 2008, a vice president wrote to an external banker employed at Merrill Lynch:

"tibor will go down slightly but not much… euroyen tibor isn’t really reflective of actual money market condition in japan… people just randomly make those numbers up… pretty much like libors tho!"

5. It's all Greek to me...

On 16 July 2009, a managing director and the head of the London money market derivatives desk discussed the strength and accuracy of the Euro Libor panel in comparison to the Euribor panel.

Managing director: "u think the quality of the euro-libor panel is 4.5bps better than euribor?"

London head: "yes"

Managing director: "not so sure, I have a hard time to believe if so many banks say they can better than the market while they are a part of it."

London head: "they're all lying anyway."

Managing director: "there is a philosophical saying: ‘one greek says: 'all greeks are lying' - who do u trust?"

6. *Shrug*

On 4 September 2009, a vice president wrote to a trader regarding Libor and Tibor.

"Am purring 34 for 3m libor and I think am far too high… JPM [JP Morgan Chase] is putting 41 for tibor… I do not understand how come we can have 3m tibor/cash at 56 at DB… DB is the among the lowest libor contribution in all ccys… UBS is corrup/manipulator in tibor fixing… i think putting such a high tibor damage the reputation of deutsche bank… Second, It is not because all the tibors setters are corrupt/manipulators that deutsche bank has to be aswell… It is not because the japanese banks are manipulating the tibor fixing that DB has to do it as well… Tibor is a corrupt fixing and DB is part of it!"

7. "Just ask..."

On 18 September 2008, an external banker, an employee of UBS requested of a submitter:

External banker: “can you set low as a favour for me?”

Submitter: “done.”

External banker: “i'll return favour when i can… just ask.”

Read NYSDFS's consent order in full, including conversations between traders.

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