Today's LIBOR Rates
1 M |
0.31563 |
 |
3 M |
0.47500 |
|
6 M |
0.68794 |
|
1 YR |
1.06438 |
|
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The Banks Behind LIBOR
Deutsche Bank AG
March 07, 2009
“Contributor banks” selected by the British Bankers’ Association (BBA) report their daily interbank lending rates for different maturities and currencies, and from these data the BBA computes the LIBOR indices. This is an overview of one of those contributor banks.
Deutsche Bank AG is a contributor for each of LIBOR’s 10 monitored currencies. The institution is designated a “universal bank” for having a diverse range of services including commercial banking and investment banking. Founded nearly 140 years ago as the industrial revolution was surging, Deutsche Bank AG has been closely tied to European and world economic and political events, including what it calls its “darkest chapter” during the Third Reich. Today, the bank is a respected financial leader, employing over 80,000 people in more than 70 countries.
Adelbert Delbrück founded Deutsche Bank in 1870. The industrial revolution was reaching a crescendo with advancements such as the Bessemer steel process, expanded rail transportation and telegraph communication. At the time, British banks were dominant in financing German foreign trade. Within its first three years, Deutsche Bank opened five branches, including one in Japan and one in China. The bank financed electrical engineering and foundry businesses in Germany and ventures overseas such as the Northern Pacific Railroad and the Baghdad Railway.
Over ensuing decades, Deutsche Bank took part in the financing and growth of major companies such as Krupp, Bayer, Lufthansa and Daimler-Benz. The bank itself grew through a series of mergers in the latter 19th century and the early 20th century. During Germany’s economic struggles following World War I, Deutsche Bank merged with its primary rival, Disconto-Gesellschaft, constituting what was then Germany’s largest banking merger.
With Adolf Hitler’s ascendency in 1933, Deutsche Bank became complicit in Nazi financial schemes until the end of World War II, including the seizure of Jewish assets, the incorporation of banks in occupied territories, and construction financing for Auschwitz and an IG Farben factory near the death camp that employed slave laborers. To Deutsche Bank’s credit, the modern institution fully acknowledges its shameful actions and has commissioned independent historians to document its role in the Third Reich.
Following World War II, the Allies split Deutsche Bank into 10 regional institutions that later coalesced into three primary banks. These three banks regrouped as Deutsche Bank AG in 1957. The bank entered general retail banking and began a new era of international expansion with acquisitions in Europe and the United States. After the fall of the Berlin Wall, Deutsche Bank AG established its presence in the former East Germany and across Eastern Europe.
2001 was a milestone year as Deutsche Bank AG adopted a binary structure, grouping business units within the Corporate and Investment Bank Group and the Private Clients and Asset Management Group. Shortly after 9/11, the bank’s shares began trading on the New York Stock Exchange.
The accuracy and relevance of LIBOR rests on its contributor banks. With Deutsche Bank AG, LIBOR has a constituent that has played a key role in modern banking—from the nobility of furthering capitalism in the liberated Soviet bloc to the criminality of funding Nazi atrocities. Today, the bank itself demands and broadcasts a full account of its history as it takes a central role in the global economy of the 21st century.