The logo of the German Federal Financial Supervisory Authority BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) is pictured outside a BaFin office building in Bonn, Germany on April 15, 2019. REUTERS / Wolfgang Rattay

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  • Setback for the lender as it seeks to restore its reputation
  • Deutsche Banks agrees and says they have improved controls

FRANKFURT, Dec. 29 (Reuters) – German financial regulator BaFin has fined Deutsche Bank (DBKGn.DE) nearly $ 10 million over Euribor interest rate checks in a setback for largest lender of the country as it seeks to restore its reputation.

The fine of 8.66 million euros ($ 9.77 million) announced on Wednesday is the first imposed by BaFin under a 2018 regulation aimed at preventing manipulation of the Euribor, the index of reference of the interbank offered rate in euros used in the financial sector.

“The bank sometimes did not have effective prevention systems, controls and policies in place,” BaFin said.

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Deutsche Bank said it accepted the fine and put in place measures to improve its controls over Euribor.

The bank added that there was no reason to believe it had submitted incorrect rates to the administrator of the benchmark.

The period in question was between April 2019 and April 2020, a source familiar with the matter told Reuters.

BaFin found flaws in some processes intended to protect the quality of the data used to calculate the rate, including weaknesses in regular checks and other organizational precautions, the source said.

The bank has been the subject of numerous regulatory and legal investigations over the past decade. This includes allegations of rate rigging involving several global banks.

In April, BaFin ordered Deutsche Bank to put in place additional safeguards to prevent money laundering.

Under new leadership, BaFin itself attempted to restore its image after failing to detect wrongdoing before the collapse of German payment firm Wirecard last year.

($ 1 = 0.8861 euro)

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Reporting by Tom Sims Editing by Louise Heavens and David Goodman

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