German banking regulator Bafin has demanded documents from Deutsche Bank as part of a probe into suspected manipulation of benchmark gold and silver prices by banks, the Financial Times reported, citing sources.
According to the publication, Bafin has investigated the bank’s staff during several on-site inspections over the past few months.
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The probe from the German watchdog comes as regulators around the world step up their scrutiny of benchmarks after the recent Libor interbank lending scandal led to hefty fines for banks.
The UK’s Financial Conduct Authority has also been looking at precious metals as part of a broader review of financial benchmarks.
In the wake of the recent Libor interbank lending scandal, questions have been raised about how benchmark rates are set, prompting authorities and banking industry bodies worldwide to overhaul rate-setting processes.
Currently, gold fixing happens twice a day by teleconference with five banks: Deutsche Bank, Bank of Nova Scotia-ScotiaMocatta, Barclays Bank Plc, HSBC Bank USA, NA and Société Générale. The fixings are used to determine prices globally.
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By GlobalDataDeutsche Bank is also one of three banks that take part in the equivalent process for silver.
