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Former Deutsche Bank executive denies helping Bittar rig Euribor

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Former Deutsche Bank executive denies helping Bittar rig Euribor
FILE PHOTO: The Deutsche Bank headquarters are seen in Frankfurt, Germany October 29, 2015. REUTERS/Kai Pfaffenbach   -   Copyright  Kai Pfaffenbach(Reuters)
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By Kirstin Ridley

LONDON (Reuters) – A former Deutsche Bank managing director, charged with manipulating global Euribor interest rates, on Tuesday denied helping convicted trader Christian Bittar and said any assistance his team gave his former colleague was inappropriate.

Andreas Hauschild, who ran the bank’s Frankfurt team responsible for rate submissions, told Southwark Crown Court he was unaware of such conversations in 2005 and that it was inappropriate to request rates to suit trading positions.

“This is not what you do … it is not proper,” the 54-year-old German said on his first full day in the witness box.

He said he first saw communications between Bittar, a former Deutsche Bank derivatives trader, and his team after prosecutors from the UK Serious Fraud Office (SFO) sent him documents about the case.

“I was in Turkey with the family on holiday (when those conversations took place),” he said, as a court clerk showed the jury a photograph of the family holiday, which was developed in July 2005.

Hauschild also denied trying to manipulate Euribor submissions by selling cash in the market, by asking colleagues to help set rates that would benefit his own trading positions or by helping Bittar, when his former London-based colleague begged him to help influence rates in 2006.

He is charged with conspiracy to defraud over the alleged manipulation of Euribor (the euro interbank offered rate), a Brussels-based benchmark that helps determine rates on around $180 trillion of global financial contracts and loans.

Prosecutors allege bankers rigged rates to benefit trading positions, deliberately ignoring rules that they should be set independently of commercial interests.

Hauschild said he had little recollection of emails sent 14 years ago, but that he had tried to piece together what had been meant from trading records and other documents.

Hauschild, who was in charge of money markets in continental Europe and worked at Deutsche Bank between 1988 and 2006, picked out examples where his trading book was at odds with rate requests in the team or with Deutsche Bank’s rate submissions.

In the seventh rate-rigging trial brought by the UK Serious Fraud Office, Hauschild is accused of conspiring with others at Deutsche Bank, Barclays, Societe Generale and other banks between January 2005 and December 2009.

Euribor, like its Libor (London interbank offered rate) counterpart, is designed to reflect the cost of borrowing between banks and is set after submitters at a panel of major banks report their estimated costs of borrowing over various periods to an administrator, who calculates an average.

The jury has heard that Bittar has already been convicted over the conspiracy alongside one-time Barclays trader Philippe Moryoussef, ex-Barclays senior rate submitter Colin Bermingham and former Barclays derivatives trader Carlo Palombo.

(Reporting by Kirstin Ridley; Editing by Alexander Smith)

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