* Bafin questions Deutsche Bank's internal probe - sources
* To intensify its own probe of Deutsche Bank - sources
* Too early to draw conclusions about probe - source
By Matthias Sobolewski and Edward Taylor
BERLIN/FRANKFURT, April 18 Germany's financial
regulator has doubts about Deutsche Bank's internal
probe into its role in a global interest rate rigging scandal
and will step up its own investigations into the bank, two
sources familiar with the matter said.
Regulators across the world are investigating more than a
dozen banks and brokerages over allegations they manipulated
benchmark interest rates such as Libor and Euribor, which are
used to underpin trillions of dollars of financial products from
derivatives to mortgages and credit card loans.
While German watchdog Bafin cannot itself impose fines, its
input is expected to feed into settlement talks between Deutsche
Bank and regulators in the United States and Britain.
Bafin has been reviewing Deutsche Bank's internal findings
as part of its own probe and has sent a progress report to
Germany's finance ministry, the sources said on Thursday.
This report said that Bafin needed to step up its own
investigations into Germany's biggest lender because it
disagreed with some aspects of the bank's own conclusions, one
of the sources said, without elaborating.
Deutsche Bank's internal investigation is being led by its
legal department with the support of external counsel.
Three people with knowledge of the matter told Reuters in
February that Deutsche Bank's top managers were unlikely to be
sacked as a result of the internal probe.
Deutsche Bank, Bafin and the Bundesbank, which is also
responsible for banking supervision, declined to comment.
There is no formal deadline for Bafin to deliver a final
report. It is too early to forecast the outcome of the
intensified probe, the second source said.
One of the two sources said that at this stage there was no
sign of a "nasty surprise," without elaborating.
Deutsche Bank has already made provisions for possible fines
in the Libor case, sources close to the bank have told Reuters.
Analysts see the likely exposure at less than 500 million
euros ($654 million). Swiss bank UBS agreed in
December to pay $1.5 billion to settle charges of rigging
benchmark interest rates.
Deutsche Bank has suspended or dismissed seven employees
involved in setting benchmark rates as part of its own
Bafin is working with the Bundesbank and accountant Ernst &
Young on its probe, delving into suspected misconduct
by individual traders and their counterparts at other banks.
In February, it said a key issue was whether banks reacted
quickly enough once problems became known, and whether they
reached the right conclusions.