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Business

Deutsche to pay $38 mln to settle silver fix

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Business

Deutsche to pay $38 mln to settle silver fix

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COMING UP:Deutsche to pay $38 mln to settle silver fix

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00:00:01
>> Another fine for Deutsche Bank, this time over allegations it conspired to fix silver prices. The lender forced to pay $38 million to settle the case in the US. In the litigation investors claimed the German lender HSBC and Bank of Nova Scotia rigged prices through a secret daily meeting called the Silver Fix.
00:00:21
The alleged conspiracy dates back to 1999, with prices suppressed on roughly $30 of silver and silver financial instruments. It's yet another bit of bad news for the German bank, which has been plagued by a massive $14 billion US fine for mis-selling mortgage securities and a slump in its share price.
00:00:40
Reuters senior correspondent Ed Taylor is in Frankfurt.>> Deutsche's piecemeal approach to cutting cost and wending down its balance sheet seemed to be going fine until this Department of Justice fine turned up. Now, bigger steps are required and more drastic action. This may force Deutsche to sell assets that it didn't really want to sell quite yet.
00:00:59
>> Sources telling Reuters that the bank is looking at a possible strategy shift in the United States. Abandoning it's most important market looks unlikely, but it could scale down it's activities there.>> Trying to be a member of the big league, competing with JP Morgan, Morgan Stanley, Goldman Sachs on their home turf is a really tough goal.
00:01:17
It's taken lots of banks many many years to build a franchise there and hardly any European banks have made money in America.>> But while the DOJ settlement might ultimately come down a bit, the bank could face other fines over suspected money laundering. All this could leave Germany's flagship lender with limited options.
00:01:35
>> A fire sale is bad, capital raising is limited, so Deutsche really has a tough time ahead of it.>> Deutsche's one-fifth fall in revenue in the first half looks a lot like the scale of the year-on-year decline Britain's RBS suffered six years ago. That snowballed to leave RBS a husk of a its former self.