Exclusive: Germany pushes Libor probe of Deutsche Bank - sources

FRANKFURT Fri Jul 6, 2012 7:18pm BST

A visitor walks past the bank's logo prior to Deutsche Bank's annual news conference in Frankfurt February 2, 2012. REUTERS/Kai Pfaffenbach

A visitor walks past the bank's logo prior to Deutsche Bank's annual news conference in Frankfurt February 2, 2012.

Credit: Reuters/Kai Pfaffenbach

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FRANKFURT (Reuters) - German markets regulator BaFin is conducting a special probe of Deutsche Bank (DBKGn.DE) as part of a wider investigation into possible manipulation of the London Inter Bank Offered Rate (Libor), two people familiar with the matter said on Friday.

The German regulator declined to comment specifically on whether it was probing Deutsche Bank, but said it was in looking into suspected manipulation of Libor rates by banks.

"We are making use of our entire spectrum of regulatory instruments, so far as this is necessary," a spokesman said.

Deutsche Bank shares extended losses after the news and traded 4.3 percent lower at 4:23 p.m. British time.

Results from the probe are expected to emerge in mid July, one of the sources said.

They said the investigation was a so-called special probe initiated by the regulator, which is more severe than routine probes which are initiated by a third party, for example a bank.

British bank Barclays (BARC.L) was fined $453 million (292.6 million pounds) by U.S. and British authorities last week, becoming the first bank to settle in an investigation that is looking at more than a dozen other banks and submissions they made for calculating Libor rates.

Deutsche Bank declined to comment but referred to its quarterly report which said the bank has received various subpoenas and requests for information from certain regulators and governmental entities in the United States and Europe, in connection with setting interbank offered rates for various currencies.

These inquiries relate to various periods between 2005 and 2011. At the time, Deutsche Bank said it is cooperating with these investigations.

As the credit crisis intensified between 2006 to 2008, allegations started mounting that Libor no longer reflected reality and authorities undertook to examine whether traders tried to influence whether the rate went up or down in order to profit on bets on the direction it would go.

(Reporting by Jonathan Gould, Alexander Huebner and Philipp Halstrick; writing by Edward Taylor)

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