WSJ: Bank Made Huge Bet, and Profit, on LIBOR
The Wall Street Journal reported that Deutsche Bank documents show for the first time the scope and manner in which a bank painstakingly constructed a string of trades in hopes of profiting from small changes in various rates.
The Journal said that large banks routinely engage in such trading, and there is no indication that the moves in 2008 by Deutsche Bank affected the market or were illegal. But the bets illustrate the size of the risks one bank was prepared to take in trading on tiny rate moves
Regulators have been investigating allegations that more than a dozen banks, including Deutsche Bank, rigged LIBOR and other interest rates underpinning trillions of dollars in loans and other financial contracts. The probe has already produced settlements totaling nearly $2 billion with Barclays and UBS.
To read the Wall Street Journal story, click here.